Favorable Fiscal Self-Sufficiency Enables Local Governments to Better Improve the Environmental Governance—Evidence from China’s Lower-Pollution Areas

Zhijun Gu, Chaowei Tian, Zeyuan Zheng and Shujian Zhang ()
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Zhijun Gu: School of Government, Shenzhen University, Shenzhen 518118, China
Chaowei Tian: School of Government, Shenzhen University, Shenzhen 518118, China
Zeyuan Zheng: School of Government, Shenzhen University, Shenzhen 518118, China
Shujian Zhang: School of Government, Shenzhen University, Shenzhen 518118, China

Sustainability, 2022, vol. 14, issue 23, 1-14

Abstract: With the rapid development of industrial economy, local governments in China have invested a large amount of financial funds in environmental protection. In the era of widespread use of clean energy, local governments have a greater responsibility to coordinate fiscal policies with industrial development policies to improve regional environment. Local governments with large fiscal surpluses would make more efforts to improve environmental efficiency, rather than attract heavily polluting industrial enterprises to develop their local economies, and more likely to promote the use of clean energy equipment and raise environmental awareness in government. This paper focuses on testing the impact of abundant fiscal revenue of local governments on the efficiency of regional environmental governance with the data in all prefecture-level cities of China’s Guangdong province from 2001 to 2020. We estimate local environmental governance efficiency score with super-efficiency SBM method, taking unexpected output into account. Then we find that fiscal affluence has significant positive effect on the efficiency of environmental governance and the environmental awareness of the government also has obvious help in improving local environmental efficiency. We hope that these findings will provide practical help for local governments to improve their fiscal policy agendas and the quality of environmental governance.

Keywords: fiscal decentralization; fiscal self-sufficiency; local development; environmental governance; DEA; China (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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