Study The Effects Of Fiscal Decentralization On Inequality Of Environmental Quality Within The Provinces

The quality of environment is one sort of the basic public products, which is the must service government have to provide. To improve the quality of the environment is an action of safeguarding the people’s environmental rights and interests, it helps to promote social harmony and stability. However, our country is undergoing a period of rapid development of industrialization and urbanization, at this time, the relative shortage of resources, the limited capacity of the environment have become the basic features of the new situation of our country, lack of development and transformation is the principal contradiction of the economic and social development, resulting in insufficiency supply of environment, imbalance of basic public services and inharmonious of the regional development. As the environment has the "public goods" attribute, it is difficult for market to effectively provide, so the government’s behavior plays a decisive role. Our government also proposed to establish the people’s livelihood finance, and gradually realize the equalization of public services. However, government expenditure preference and competition behavior affect the supply of public goods directly, while China’s fiscal decentralization system determines the expenditure structure of local government to some extent. Therefore,it has theoretical and practical significance to dynamically and systematically study the inequality of environmental quality under the background of fiscal decentralization system, which helps to develop fiscal policy in line with the actuality, to promote the equalization of public service, and further promote the healthy and sustainable development of the societyBased on the analysis of China’s fiscal decentralization and regional differences in environmental quality, this paper comprehensively discusses the direct and indirect effects of fiscal decentralization on environmental quality. First of all, we select fiscal decentralization index and the pollution index which can comprehensively reflect the environmental quality, and then use the dimensionless synthetic method and Gini coefficient to calculate and analyze China’s regional fiscal decentralization and inequality of the environment quality from 2005 to 2013 based on the corresponding data, and then through theoretical analysis to explore the direct and indirect way of fiscal decentralization affecting inequality of environmental quality; finally constructs Gini coefficient to estimate the inequality of environmental quality in all provinces and the dynamic panal model based on the rusults, then uses the GMM method to study how fiscal decentralization effects on the inequality of environmental quality. The results show that, the fiscal decentralization can narrow the inequality of environmental quality through the direct effect, but inhibits the above effect through affecting the region’s economic development; In addition, the fiscal decentralization raises the inequality in eastern region, but reduces that in central and western regions. Besides, the other control variables as the economic development, population density, industrial structure and foreign investment also play an impact on inequality of environmental quality in varying degrees.