On The Incentive Machanism Of Local Governments Implementing Environmental Function In China

Homo economics theory is an important basic theory in modern westerneconomics. In the1950-60s, American economist James A. Buchananintroduced the homo economics theory into the political field and analyzedhuman choice in political action. So the theory was called public choicetheory, which believed politicians, officials and voters were homo economicsin political actions and always tried to maximize their own benefits. Fromhomo economics perspective, local government is a kind of organizationconsisting of individuals of homo economics feature such as selfish,opportunism.Local government is a very important legal subject in environmentallegal relations. The situation of local governments implementingenvironmental function is directly related to which the goal of environmentallaws and policies would be carried out or not in a country. However, in ourcountry, this is an existing fact that some local officials attached importanceto the economic coarse growth at the cost of environment quality in order to maximaze the own benefits over a long period. From lots of seriousenvironmental pollution cases in recent years, we can easily find out thatlocal governments have not actively implemented their environmental duties,and this is becoming a big barrier during national environmental laws andpolicies being carried out in local levels.The cause is related to the incentive mechanism. On the one hand, frompositive incentive mechanism, fiscal decentralization, administrativedecentralization, and the cadre assessment system focusing on GDP rate playa positive incentive role for the local governments in pursuit of economicgrowth. That is, fiscal decentralization made local governments have enoughmotivation seeking more fiscal revenue; administrative decentralization madelocal governments get more discretional powers and they can use thesepowers provide protection for their economic growth; the cadre assessmentsystem with only GDP performance play more powerful incentive role forlocal governments seeking economic growth, so that their aim was only forGDP growth rate. However, just because local governments excessivelyfocused on the GDP growth rate, it made local economic growth became akind of coarse growth, this brought very adverse effect on natural resourcesand environments. Local governments only care about local economic growthand they ignore their environmental duties, doing so, there are serious environmental problems occurred because of local governments' action. Onthe other hand, from negative incentive mechanism, there is no effectivesupervision system to control local governments' discretional power and sothat local governments can use discretional power to seek coarse economicgrowth at the cost of natural resources and the environment despite theirenvironmental duties.So, in order to change this adverse situation and motivate localgovernments positively implement their environmental function and duties, itneeds to improve incentive systems from four aspects above. Firstly, it needsto improve the fiscal decentralization and provide finance support. Secondly,it needs to make rational duty allocation among various levels of localgovernments, and made their fiscal ability matching their responsibility, andprovide protection for their acquired power and interests by law institution.Thirdly, it is necessary to add environmental indicator into the cadreassessment system so that local officials know that they can get promotionopportunities by positively implementing the environmental duties. Finally, itneeds to improve supervision and accountability systems on localgovernments, so that local governments know that they would have muchloss if they don not implement the environmental duties. Above all, it isnecessary for us to improve the incentive mechanism including positive ones and negative ones to promote local governments positively implementingtheir environmental duties through perfecting environmental laws andpolicies.