Measuring the Efficiency of Fiscal Policies for Environmental Pollution Control and the Spatial Effect of Fiscal Decentralization in China

Caihua Zhou and Xinmin Zhang
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Caihua Zhou: School of Public Finance and Taxation, Zhejiang University of Finance and Economics, Hangzhou 310018, China
Xinmin Zhang: Institute of Ecological Civilization, Jiangxi University of Finance and Economics, Nanchang 330013, China

IJERPH, 2020, vol. 17, issue 23, 1-19

Abstract: This paper uses both fiscal expenditure policy and fiscal revenue policy as input indicators and selects environmental pollution control results reflecting different forms and sources of pollution as output indicators. The efficiency of fiscal policies for environmental pollution control (EFPE) of 30 provincial-level administrative divisions in China from 2007 to 2017 is measured by adopting the data envelopment analysis (DEA) method. Then, the spatial effect of fiscal decentralization on EFPE is empirically analyzed by using the spatial lag model (SLM). The results show that EFPE values in China have been greatly improved overall since 2014. The change in technical efficiency (TE) is caused mainly by the change in pure technical efficiency (PTE). EFPE values have regional heterogeneity and convergence. The eastern region has clearly higher EFPE values than other regions. The growth rate of the low efficient region is greater than that of the high efficient region. Fiscal expenditure decentralization has a direct negative effect and spatial spillover effect on EFPE values, while fiscal revenue decentralization has a non-significant effect. Based on these results, this paper proposes the following policy implications: increasing the level of fiscal expenditure of environmental pollution control and improving the central transfer payment system for environmental protection; reforming the government performance assessment system and innovating the conditions of government expenditure on environmental pollution control; and promoting horizontal fiscal cooperation in cross-regional environmental governance.

Keywords: fiscal policies; environmental pollution control; technical efficiency; fiscal decentralization; spatial effect (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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