The Strategy Interaction Of Intergovernmental Competition In Environmental Regulation

With the continuous transformation of Chinese-style fiscal decentralization,the simultaneous development of power,responsibility and tax expenditure scope of local government has greatly promoted the rapid development of economy in the area since the reform and opening up,leading the whole Chinese economy at an annual rate of nearly 10% of the GDP growth.However,a number of practical problems such as the deterioration of the regional environment have raised academic discussions.In the paper,we analyzed the influence mechanism and factors of environmental regulation strategy interaction from the intergovernmental competition between the mutual influences of the local governments in environmental regulation policy.And then we provide policy advice on the theoretical and empirical results for the central government.In the part of theoretical analysis,we firstly review the research literature on the interactive strategy of government environmental regulation and government behavior.Then we make clear its performance and sources of environmental regulation strategy interaction between governments.That is,in order to improve the economic level in the region,the local government competes for the flowing factors of production around the area of environmental regulation,thus forming the competition of environmental regulation.Then,we construct the flowing factors of production equilibrium model under three sectors based on the assumption of the limited rational person of local government,it proves the existence and factors of regional environmental regulation of strategy interaction.In the part of empirical study,based on the study of the theory,we construct two propositions on regional environmental regulation strategy interaction,combined with provincial panel data from 2005 to 2014.We use Moran I spatial autocorrelation analysis and spatial Durbin model empirical test,and then we test the two propositions proposed by the theoretical model above,in using the indexes such as environmental regulation cost,environmental regulation supervision and environmental regulation revenue.The results indicate that there are close connections between the environmental regulations of a local government and its adjacent areas.There exists an environmental regulation strategy interaction between local governments,and local governments usually imitate the behaviors between each other.In order to attain the flowing factors of production,the local governments are more likely to release environmental regulations,which lead to the same environmental regulation strategies and there exists a free riding phenomenon among local governments.The competition between environmental regulations has raced to the bottom.In the last part,we put forward policy recommendations to the central government.We hope the central government can innovate environmental regulation policy,improve the ecological compensation system of transfer payments,optimize the performance evaluation system,promote the cooperation between local governments,and guide the environmental regulation from race-to-the-bottom to race-to-the-top.