Study On The Green Effect Of Chinese Fiscal Expenditure

With the rapid development of economy and society,the problem of environmental pollution becomes even worse.The capacity of ecology and environment has been overloaded,and even has become a bottleneck which restricts economic and social development at present.In order to solve the problem of environmental pollution,the environmental governance is essential.Due to the factors,such as the environmental externalities,unclear property right,asymmetric information and the like,government should implement the effective interventions,with the use of excitation and restraint,so as to promote the clearer production,Low-Carbon consumption and green development.Public finance is the foundation and prominent pillar for the state governance,and shall play an important role in achieving the state governance modernization and the new developments in which the green development is included.The functions of the public finance can be divided into the functions of an income end,the functions of an expenditure end and the functions of a transfer payment end.The functions of the expenditure end can be comprehensively analyzed from three aspects including the size,structure,and system(longitudinal expenditure decentralization and horizontal expenditure competition)of fiscal expenditure.Since the reform the opening-up,the scale of Chinese fiscal expenditure is getting larger and larger and the structure is also more rational.What is the effect of these policies? Will direct expenditure on environmental protection play a role in saving energy and reducing emissions? Do other types of fiscal expenditures have various impacts on the environment? What are the transmission mechanisms by which the expenditure responsibilities of different levels of government are distributed and the competition among the same-level governments affects the environment? It is extremely important to establish the green fiscal expenditure system at the key stage of new,high-quality economic development and ecological civilization construction,which is also the focus of this dissertation.This paper focuses on the excitation mechanism of the fiscal expenditure in the green development,from the angle of the fiscal expenditure,sorts out the procedure that the fiscal expenditure affects the green development,demonstrates and measures the level of the green effect of different fiscal policies,finds out the parts that affects the expansion of the performance of the green development and the defects of the system.The reform and innovation may be helpful in promoting the green development.The conclusion and optimization methods of this paper include:The expansion of fiscal expenditure represents the improvement of the national economic level,but the impact on environmental quality is not certain,and the expansion of environmental expenditure size has a clear green effect.Since the reform and opening up,China’s fiscal expenditure has been increasing year by year,and most of the years have even exceeded the growth rate of GDP.The impact of such a large scale of expenditure on the environment cannot be underestimated.The first part of the third chapter of the thesis analyzes the green effect of fiscal expenditure scale by constructing a fixed-effects model based on Chinese provincial panel data.The study found that: First,the scale of total fiscal expenditure on environmental pollution is uncertain,which may be related to the structure of expenditure.Second,the expansion of environmental protection expenditure will have a significant emission reduction effect on environmental pollution,which indicates that environmental protection fiscal expenditure has the role of correcting externalities.Third,we constructed indicators of eco-efficiency and empirically examined the relationship between the scale of total fiscal expenditure and the scale of environmental protection expenditure and eco-efficiency.It was found that the impact of total fiscal expenditure on ecological efficiency was uncertain,but the scale of environmental protection expenditure was obvious.Improve efficiency.The above research is based on the study of emission reduction and efficiency improvement,and more comprehensively measures the green effect of the scale of fiscal expenditure.Different fiscal expenditure structures have different green effects,and the fiscal expenditure structure that favors people’s livelihoods has obvious pollution reduction effects.Since the reform and opening up,China’s fiscal expenditure has been increasing year by year,from 122.883 billion yuan in 1980 to 220.06 billion yuan in 2018.Faced with such a large scale of fiscal expenditure,how the government should arrange the structure of fiscal expenditure is particularly important.Different expenditure structures will have different environmental effects.The third part of the thesis is based on the provincial panel data to analyze the direct impact of the people’s livelihood expenditure structure including environmental protection expenditure on environmental pollution,and then introduce the vertical imbalance indicator that affects the structural bias of fiscal expenditure,and further study its impact on the environment.The study found that the structure biased towards people’s livelihood expenditure has an emission reduction effect on environmental pollution,but after the introduction of vertical imbalance indicators,the emission reduction effect is reduced,which indicates that vertical imbalance will cause distortion of fiscal expenditure structure.In order to make up for the fiscal gap caused by vertical imbalances,local governments will be more inclined to economic expenditures that can obtain economic benefits in the short term,and reduce people’s livelihood expenditures,especially those with soft constraints.This will bring environmental pollution,which is not conducive to Improvement in environmental quality.Under the framework of multi-level government,decentralization plays an important role in motivating and restraining local governments.This chapter mainly studies the green effect of expenditure decentralization.First,we build a fixed effect model to study the impact of fiscal expenditure decentralization on the environment pollution,however,the connotation of all kinds of fiscal expenditure differ in thousands of ways in practice,and its corresponding fiscal powers are various.The environmental effect caused by distribution and redistribution of different government power at different levels may also make a huge difference.And in fact,China has not set up a scientific and standardized system of the division of expenditure responsibility.To expand the above research,we divide expenditure decentralization into economical expenditure decentralization,education expenditure decentralization,science and technology expenditure decentralization,maintenance expenditure and environmental decentralization.From the perspective of province,we study the impact of all kinds of the decentralization before 2007 and after 2007 on the environment pollution,the effect is different.We find that economic decentralization and education decentralization could aggravate environmental pollution,which indicates that responsibility allocation of economy and education is not reasonable,and responsibility allocation of maintenance expenditure that is administrative expenses is more reasonable,The decentralization of environment,introduced after 2007,have inhibiting effect on pollution,so it makes sense to devolve it for local governments.From the perspective of prefecture-level cities,we find that expansion of the jurisdiction of county-level economic expenditure has a very negative impact on regional environmental pollution in the framework of prefecture-level cities,and county-level governments are faced with the pressure of regional competition,economic development and fiscal difficulties.Finally,from the perspective of county,the dissertation studies the green effect of county-level environmental decentralization by using DID,and finds that the decentralization of environmental management authority from city to county will lead to strategic environmental regulation behavior of county-level government and aggravate the level of county pollution.Under the fiscal decentralization system,horizontal competition between local governments will lead to environmental pollution.Under the fiscal decentralization system,local governments,which have information advantages,are the most efficient executors of various economic and social affairs,which is consistent with the view of environmental federalism in the field of controlling environmental pollution.However,Because of Chinese specific governance framework,the combination of fiscal decentralization system and "top-down" official selection system makes local government officials compete in order to take the leading position in performance evaluation.The space interaction is likely to have impact on environment pollution,economy and society.For example,the local governments pursue economic interests,then form a biased fiscal expenditure structure in which economic development is as the central,fiscal expenditure that could obtain economic benefits in the short term leads to environmental pollution.The result is that governments choose high speed development of economy,and neglect the environmental pollution.However,the existing literature has not discussed the pollution effect of fiscal expenditure competition in-depth,and the neglect of this important factor in the research may lead to our misunderstanding of the environmental effect of fiscal expenditure.Therefore,this dissertation will discuss the pollution effect of fiscal expenditure competition from the perspective of spatial strategy interaction,and include the impact of fiscal decentralization system and official selection system,to grasp the impact of government fiscal expenditure from the perspective of space,and have a deeper understanding of the environmental effect of fiscal expenditure.In this chapter,based on the provincial panel data from 1998 to 2015,we build a SDM model,and find that the pollution exists an obvious pollution path dependence and spatial spillover.The local government competition of fiscal expenditure,not only directly causes pollution in the region,but also make pollution spillover effect on adjacent regions to participate in the competition of fiscal expenditure.The fiscal decentralization system is further aggravated the pollution effect of fiscal expenditure competition.Therefore,according to the principals of fiscal modernization and coordinated regional development,promoting the reform of fiscal decentralization system and establishing a coordinated regional environmental governance mechanism are conducive to solving the dilemma between economic growth and environmental pollution.Therefore,the main policy recommendations of this paper are as follows: First,adjust the scale of fiscal expenditure,optimize the structure of fiscal expenditure,further increase the scale of environmental protection expenditure,and build the optimal scale and structure of green fiscal expenditure;second,promote the inter-departmental authority of the lower and lower levels.The reform of the division of expenditure responsibility,the establishment of a clear system of powers and expenditures between different levels of government,to improve the green effect of decentralization;the third is to establish a regional environmental coordination governance mechanism,the central government should guide local governments to establish environmental pollution control The regional coordination mechanism internalizes the externalities of environmental pollution and reduces the vicious competition for environmental pollution.The fourth is to establish a reasonable official promotion incentive mechanism and green GDP local government assessment mechanism,incorporate the same important concepts of environmental protection and economic development into the local government’s policy objectives,and implement the concept of green development throughout the local assessment and economic development process.The fifth is to accelerate the reform of the environmental system and build a system of environmental fiscal expenditure based on the construction of ecological civilization.