Game Theory-Based Analysis of Local Governments’ Behavioral Dissimilation in the Third-Party Soil Pollution Control under Chinese-Style Fiscal Decentralization

Caihua Zhou
Additional contact information
Caihua Zhou: School of Public Finance and Taxation, Zhejiang University of Finance and Economics, Hangzhou 310018, China

Land, 2021, vol. 10, issue 4, 1-20

Abstract: The participation of a third party of the environmental service enterprise theoretically increases the level and efficiency of soil pollution control in China. However, Chinese-style fiscal decentralization may have a negative impact on the behaviors of participants, especially the local government. First, this paper conducts a positioning analysis on participants of the third-party soil pollution control in China and discusses the behavioral dissimilation of the local government under fiscal decentralization. Second, taking the government’s third-party soil pollution control as a case, a two-party game model of the central government and the local government is established around the principal-agent relationship, and a tripartite game model of the central government, the local government, and the third-party enterprise is designed around the collusion between the local government and the third-party enterprise. The results show that Chinese-style fiscal decentralization may lead to the behavioral dissimilation of local governments, that is, they may choose not to implement or passively implement the third-party control, and choose to conspire with third-party enterprises. Improving the benefits from implementing the third-party control of local governments and third-party enterprises, enhancing the central government’s supervision probability and capacity, and strengthening the central government’s punishment for behavioral dissimilation are conducive to the implementation of the third-party soil pollution control. Finally, this study puts forward policy suggestions on dividing the administrative powers between the central and local government in third-party control, building appraisal systems for the local government’s environmental protection performance, constructing environmental regulation mechanisms involving the government, market and society, and formulating the incentive and restraint policies for the participants in the third-party soil pollution control.

Keywords: soil pollution; third-party control; local government; Chinese-style fiscal decentralization; game theory; mixed strategy (search for similar items in EconPapers)
JEL-codes: Q15 Q2 Q24 Q28 Q5 R14 R52 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.mdpi.com/2073-445X/10/4/389/pdf (application/pdf)
https://www.mdpi.com/2073-445X/10/4/389/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jlands:v:10:y:2021:i:4:p:389-:d:532397

Access Statistics for this article

Land is currently edited by Ms. Carol Ma

More articles in Land from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().