The Study On Region’s Environmental Fiscal Policy Competition And Its Impact On Environmental Pollution

Since the reform and opening up, China’s economy has achieved rapid growth. However, the environmental pollution is gradually serious. According to the latest the 2014 National Environmental Statistics Bulletin released by the Ministry of Environmental Protection, China is one of the world’s most polluted countries. Environmental pollution has become the focus of the central government and the society.In view of the reasons of China’s environmental pollution, there are some related theories, such as the development stage theory, the resource gift theory and the economic growth mode theory. There are less paper about reasons of environmental pollution from the perspective of system. Especially the research about the influence of environmental fiscal policy competition on environmental pollution is still in its initial stage. Meanwhile, in the research of regional competition, there are many studies on the interaction of the government in finance, but there is less competition in the regional environment fiscal policy.Firstly, this paper summarizes the literature of fiscal decentralization theory, and makes a review of the literature on the research of regional competition and environmental pollution, then makes a comment of the literature.Secondly, in the theoretical analysis, the paper establishes two stages game model of government and enterprises in the region, and put forward three propositions related to environmental fiscal policy of competition interactions and the effect between regional environmental fiscal policy competition and environmental pollution.Thirdly, based on the national and provincial environmental fiscal policy and revenue and expenditure data, this paper demonstrates three propositions through different empirical methods and models, in particular:(1) Using dynamic spatial panel model, the paper has proved that the regression results of competition areas of environmental expenditure policy in the geographically weighted are significantly positive. It indicates that the environmental fiscal policy of regional government in China’s is mutual competition. The trend of policy is analogical, and the competitive interaction behavior exists;(2) Using cluster analysis method, the degree of competition of regional environmental fiscal policy is measured, and the competitive degree of some key provinces is compared;(3) Using panel model with cross terms, the paper proves that the area of environmental fiscal policy competition behavior is one of the reasons of environment pollution, and Chinese fiscal decentralization leads to environmental pollution more serious through the fierce regional environmental fiscal policy competition.