Local Tax Competition,Fiscal Decentralization And Ecological Efficiency

As China’s economic development has achieved world-renowned achievements,people’s attention is not limited to economic construction achievements.In recent years,people have paid more attention to the protection of the ecological environment.The increasingly serious environmental problems have made people realize that the economic development mode of “high investment,high consumption and high pollution” adopted by China is not sustainable,so it must be considered whether economic development is efficient and sustainable at the level of ecological environment protection.Among the many factors affecting the quality of the ecological environment,tax competition and fiscal decentralization are two important indicators.Under the background of China’s current fiscal decentralization system,local governments often sacrifice economic growth in exchange for economic growth in the region due to the performance evaluation.By relaxing the supervision of environmental pollution and reducing the financial investment of environmental governance,it directly or indirectly damages the regional ecological environment.At the same time,providing tax incentives is one of the most common means of attracting corporate inflows.The existence of tax competition among local governments has dragged the ecological environment of various regions into the vicious circle of “weak competition”.Under the combined effect of tax competition and fiscal decentralization,local governments have either reduced or reduced the actual tax burden of new enterprises,or relaxed supervision and disciplinary measures on pollutant emissions,or reduced fiscal expenditures to control environmental pollution,thus worsening the quality of the ecological environment in the region.This paper empirically studies the impact of local tax competition and fiscal decentralization on regional eco-efficiency using the Spatial Dubin Model.Theoretically,the reasons and ways of tax competition and fiscal decentralization on environmental pollution are analyzed.In order to accurately describe the overall situation of environmental quality,multiple pollutant emission indicators are integrated into an environmental pollution comprehensive index by entropy method,so as to better describe the differences in environmental quality between regions as a whole.Then,the ecological efficiency values of 30 provinces in China from 2006 to 2015 were calculated by BCC model.Firstly,the spatial correlation test shows that there is obvious spatial autocorrelation between the ecological efficiency of China’s provinces.Then the spatial Dubin model is used to empirically study the impact of tax competition and fiscal decentralization on ecological efficiency.The empirical results show that the increase of tax competition in this region has a negative impact on the ecological efficiency of the region.The increase in tax competition in neighboring regions has a positive impact on the ecological efficiency of the region.Whether in the region or in neighboring regions,the increase in fiscal decentralization has a negative impact on the ecological efficiency of the region.Based on the above conclusions,this paper believes that the existing system should be optimized in terms of regulating local tax incentives,accelerating the construction of a systematic environmental tax system,reducing the degree of fiscal decentralization in pollution control,and strengthening the unified management of the central government.Finally,the efficiency and sustainability of economic development in the ecological environment protection level will be realized.