Can Government Budget Management Reconcile Environmental Governance with Sustainable Economic Development?

Jingya Qu, Wenwen Ding () and Jinghao Li
Additional contact information
Jingya Qu: School of Economics, Shandong University, Jinan 250100, China
Wenwen Ding: School of Economics, Shandong University, Jinan 250100, China
Jinghao Li: Trier College of Sustainable Technology, Yantai University, Yantai 264005, China

Sustainability, 2025, vol. 17, issue 8, 1-18

Abstract: Government budget management serves as a critical enabler for the development of a green economy and represents an essential pathway to promote sustainable urban development. The government budget delineates the scope and direction of governmental activities, while the advancement of a green economy heavily relies on the support of budgetary funds. Adopting the perspective of government budget management capabilities, this study examines the budget deviations across 288 prefecture-level cities in China from 2007 to 2021. By constructing a double fixed-effects model, we assess whether government budget management can effectively balance environmental governance with sustainable economic development, thereby fostering green economic growth. The findings indicate that government budget management indeed achieves this balance, with revenue management playing a more significant role compared to expenditure management. Mechanism analyses reveal that at the revenue level, government budget management regulates local economic behavior through tax constraints, while at the expenditure level, it drives green economic development by promoting technological innovation. Heterogeneity analysis further demonstrates that geographical differences, humanistic environment factors, and the degree of marketization significantly influence the development of the green economy. Based on these insights, this paper proposes targeted policy recommendations aimed at mitigating the tension between environmental governance and sustainable economic development and facilitating the attainment of green economic objectives ultimately.

Keywords: government budget management; deviation from budget and final accounts; environmental governance; sustainable economic development; green economic growth (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2071-1050/17/8/3720/pdf (application/pdf)
https://www.mdpi.com/2071-1050/17/8/3720/ (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:jsusta:v:17:y:2025:i:8:p:3720-:d:1638565

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

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