Does Fiscal Policy Promote Third-Party Environmental Pollution Control in China? An Evolutionary Game Theoretical Approach

Caihua Zhou, Hualin Xie and Xinmin Zhang
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Caihua Zhou: Institute of Ecological Civilization, Jiangxi University of Finance and Economics, Nanchang 330013, China
Hualin Xie: Institute of Ecological Civilization, Jiangxi University of Finance and Economics, Nanchang 330013, China
Xinmin Zhang: Institute of Ecological Civilization, Jiangxi University of Finance and Economics, Nanchang 330013, China

Sustainability, 2019, vol. 11, issue 16, 1-18

Abstract: To promote third-party environmental pollution control in China, it is necessary to dissect the mechanism of fiscal policy in third-party environmental pollution control. This study first discusses the acting paths of fiscal policies on third-party environmental pollution control in theory. A tripartite evolutionary game model involving the local government, the polluting enterprise, and the third-party enterprise is established. The replicator dynamics, evolutionary stability strategies, and numerical simulation of the behavior of the three participants are analyzed to further study the acting mechanism of fiscal policy in third-party environmental pollution control. In addition, the influences of other parameters on the implementation of third-party environmental pollution control are evaluated. The results show that the behaviors of the local government, the polluting enterprise, and the third-party enterprise influence each other. Furthermore, strengthening the relevant fiscal policy, reducing the risks of the polluting enterprise and third-party enterprise, and improving the benefit to the local government are conducive to promoting third-party environmental pollution control in China. Based on these results, this study proposes the following policy implications: formulating fiscal policies for third-party environmental pollution control, implementing fiscal policies in a dynamic and progressive manner, improving the market mechanism of third-party environmental pollution control, and strengthening the environmental performance assessment of the local government.

Keywords: environmental pollution; third-party control; fiscal policy; evolutionary game (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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