Research On The Impact Of Fiscal Decentralization On Environmental Pollution

Since the reform and opening up,China’s economic system with fiscal decentralization as its core has effectively mobilized the enthusiasm of local economic development,and has stimulated economic growth and improve the people’s quality of life.However,rapid economic development has also brought different levels of environmental pollution to many parts of the country.The report of the 19 th National Congress puts forward "accelerating the establishment of a modern fiscal system,establishing a central and local fiscal relationship with clear powers and responsibilities,coordination of financial resources,and regional balance",and put forward clear requirements for environmental quality problems in the development of China,pointing out that solve outstanding environmental problems,adhere to the common governance of the whole people,prevent pollution from the source,continue to implement air pollution prevention and control actions,accelerate water pollution prevention,strengthen soil pollution control and restoration,and strengthen solid waste and garbage disposal.In order to deal with the financial relationship between the central and local governments,adhere to sustainable development,strengthen environmental protection,and study the relationship between fiscal decentralization and environmental pollution is of great significance.First of all,this paper defines the connotation of fiscal decentralization and environmental pollution,and expounds the theoretical basis of fiscal decentralization and environmental pollution,including the theory of fiscal decentralization,the theory of public goods,the theory of externality and the theory of property right,and analyzes the mechanism of the fiscal decentralization on the environmental pollution.Secondly,it discusses the history and current situation of China’s fiscal decentralization and environmental governance,analyzes the problems existing at the present stage,and summarizes the constraints of China’s fiscal decentralization on the environment,including the multiple constraints assumed by local governments,and the single performance assessment.On the basis of literature research,it is concluded that fiscal decentralization affects environmental pollution from three aspects: local government competition behavior,industrial structure adjustment behavior and fiscal expenditure behavior.Thirdly,using the provincial panel data model from 2007 to 2017,the paper analyzes the impact of fiscal decentralization on environmental pollution in China.The empirical results show that fiscal decentralization has a significant positive correlation with environmental pollution level.Which is,fiscal decentralization has generally exacerbated environmental pollution,and the level of industrialization and population density are basically positively correlated with environmental pollution.Finally,it draws on some mature experiences of foreign typical countries on the issue of environmental pollution control under the fiscal decentralization reform,and proposes reforming the financial management system,defining the environmental responsibility of local governments,improving the financial transfer payment system,changing the performance evaluation criteria,and promote economic growth in backward areas.The innovation of this paper is to analyze the path and transmission mechanism between fiscal decentralization and environmental pollution in a more detailed way,and use the empirical model to effectively identify and test,and construct different fiscal decentralization indicators to portray China’s fiscal decentralization.In order to enhance the credibility of the model,this paper analyze the direction and size of the impact of these fiscal decentralization indicators on environmental pollution,respectively.