An Analysis Of The Ecological Environment Governance: The Institutional Approach

To govern the ecological environment is a very important human activity, which is directly related to the sustainable development of economy and society. The governance institution is one of the important elements to determine the performance of the governance activities. Based on the Neoclassic Economic Theory, Institutional Economics, The Economics of Information and Game Theory, the purpose of this study is to establish an analytical framework of the institutional research on ecological environment governance, on which an empirical study of the ecological environment governance in China is based. This dissertation consists of nine chapters including the introductory chapter, which is organized into five parts. The first part, including Chapter One, Chapter Two and Chapter Three, is the basis for the analysis and logical development of the whole thesis. Chapter One: Introductory It introduces the background, purpose and the significance of this study, summarizes and evaluates various research achievements both at home and abroad, and puts forth the train of thought and methods of this study. It shows the dissertation's innovation point, too. Chapter Two: The background of the governance institutions It analyses the background and the essence of the ecological environment problem. It discusses the origin, characteristics and the connotations of the ecological environment governance. This dissertation argues that, the appearance of ecological environment governance is connected closely with the ecological environment crisis in recent years. It has such characteristics as being necessary, long-termed complex and collective, etc. In order to coordinate the behavior of the ecological environment governance, various types of governance institutions are needed. Finally, it initially discusses the various ecological environment governance institutions. Chapter Three: The microcosmic foundation of the ecological environment governance institutions In this chapter, the author analyzes the elements one by one that constitute the microcosmic foundation. First, the thesis discusses the externality in the exploitation of ecological environment resources and the implications when the ecological environment resources as public goods. Then, the thesis discusses in the individual rationality of ecological environment governance's entity, such as the incentive of maximizing profits, bounded rationality and the inclination of opportunism. The thesis argues that, because of these traits, when people consuming the ecological environment resources or producing the ecological environment goods in a collective action, "the dilemma of collective action"may be emerge. So, it gives a good understanding to the ecological environment governance, and gives a good theoretical foundation to microcosmic research about different type of governance institutions, too. The second part is from Chapter Four to Chapter Six. Focus on the characteristics, the operation mechanism and theirs limitations, this part analyses various types of governance institutions in depth. Chapter Four: Government behavior and the compulsive institution in the ecological environment governance Because of the characteristics such as externality and public goods of the ecological environment resources, markets mechanism cannot work well, that is "market failure". In this case, central government must exercise the power to prevent the externality and to supply the ecological environment goods. But in this process central government's ecological environment governance target may conflict with other economical, social, or political targets. The target of ecological environment governance usually is placed to a secondary position. In the other hand, considering their economical benefit, the local governments may adopt the "free rider"strategies, which means they can enjoys ecological environment result without pays a bill. They may adopt the strategic behaviors when they carry out the central government's plan for ecological environment governance. In the allocation of nature resource among different areas especially the areas that in the same river basin, local governments usually adopt a non-cooperative game, so they can only get a second-class outcome, and a phenomenon called "government failure"may be emerge. On the other hand, the compulsive institutions have some information and technical obstacles when they being carried out. This gives great space to individual's opportunistic behaviors. Therefore, the compulsive institution has its limitions. Chapter Five: Property right deal and market institutions in the ecological environment governance The dissertation considers that the ecological environment problem is the result of it's property right "crowd"or "missing". According to Coase's Theorem, if the exclusive property right of ecological environment resources can be decided, then the entity of the property right may spontaneously allocate the ecologicalenvironment resources optimally through market mechanism, it may eliminate the externality effect and get the "Pareto optimum". In the world transaction cost is not equal to zero, establishing a proper property right system by government, law and other organization is very important. This chapter also analyses the market that about the right of emission pollutant. But to establish a proper system of property right is faced with many obstacles, too. So the way of property right or market institution is not a sole way to improve the quality of ecological environment. Chapter Six: The internal governance institutions of ecological environment Distinguishing from the external institutions, such as compulsive institution and market institution, the internal institutions are a system of rules that formed spontaneously by governance entities themselves. It has a unique value and function. ISO14000, which makes many enterprises around the world pursuing its recognition consciously and voluntarily, is a model of internal institution. In fact, under the condition that nature resource is in small scale, the participants can form institutions which automatically operate through carrying out a cooperative game. The advantages of the internal institutions are: (1) their operation cost is low, (2) the institutions can be carried out and restrained by the participants themselves, and (3) they can be thought as an effective supplement to the external institutions. The third part is Chapter Seven: The institution Changes of the ecological environment governance in China The thesis argues that, the institutions of ecological environment governance were formed at 1970s, through institution changes in nearly thirty years, now it has become a relatively perfect institutions system. The process of the institutions change can be roughly divided into three phases: newly establishing phase, deepened phase and completely formed phase. At each phase, the governance institution change has different content and characteristics. This chapter analyses the basic content, and the changing characteristics of governance institutions in China. The conclusion is: (1) the current governance institutions of ecological environment in China has a trait that predominated by government, (2) the governance institution is changing to the direction that equally emphasize to the ecological environment benefits and economical benefits which is different from the traditional direction that only emphasized to the ecological environment benefits, (3) internal governance institution of ecological environment is seriously deficient, this affects the objective result of the whole governance institutions somewhat. The fourth part is Chapter Eight: Governance institutional innovation of the ecological environment in China The governance institutional innovation is not onlyto satisfy the need to improve the performance of ecological environment governance, but also an appropriate response to the reality of "market failure"and "government failure", the increasing demand for green product that come from the consumer market and the national ecological security. At the present phase, the governance institutional innovation must adhere to these three principles: the coordinative principle, the mutual complement principle and the whole-considered principle. The governance institutional innovation has two channels. The first one is the market-oriented innovation , and the second one is the multi-entity innovation. Finally, the chapter analyses and comments the elements related to the governance institutional innovation, such as the information condition, the power mechanism and the special function of the government, etc. The fifth part is Chapter Nine: Case study on the governance institutional innovation of ecological environment Based on the background of the present ecological practices, that is, returning the cultivated land to planting forest or grass on it, this chapter analyses the trait, operating mechanism and the performance of the governance institution in practice. It also discusses the institution disadvantages, too. The author emphasizes that the internal mechanism of the special governance institution in returning the cultivated land to planting forest or grass are: (1) This specially designated governance institution conforms to the rationality of the peasant's behavior, and gets the ecological environment benefits through exchanging with the economic benefits, so it realizes the incentive compatibility between ecological environment benefit and economic benefit. (2) The ecological environment governance is invested by central government, so it reflects to some degree the ecological compensating principle among different areas. To establish a compensation mechanism for ecological environment, people must adopt the Kaldor-Hicks efficiency standard instead of Pareto efficiency standard. But the compensation mechanisms still have some disadvantages, especially in the intensity of the institution incentive and required-period of compensation. At present, the main task in the governance practices is to establish a perfect governance institution; it can avoid the client-agent problem and integrate the ecological environment governance with the growth of the local economy.