Achieve Sustainable development of rivers with water resource management - economic model of river chief system in China

Abstract

China has established the River Chief System (RCS) to develop mechanisms to achieve success in cross-regional negotiations of the Sustainable Water Resource Management Affairs (SWRMA). This paper aims to investigate the mechanisms developed by RCS and social welfare brought by RCS in China, and thereafter put forward suggestions for the future development of RCS. Therefore, a one-stage cooperation game was used to investigate cross-regional SWRMA negotiations with RCS. The results showed that RCS ensures that cooperative solutions are chosen in cross-regional SWRMA negotiations. Moreover, this paper used a two-stage game to explore cross-regional SWRMA negotiations without involving RCS. In this case, the involvement of the upper-level administrators and the probability of a successful negotiation are endogenously determined by local authorities. The results showed that in cross-regional SWRMA negotiations, both when the upper-level administrators are involved in the first stage and in the second stage, the cooperative solutions would be adopted. Thus, RCS is an inevitable outcome of the cross-regional SWRMA negotiations. In addition, RCS could help to avoid transactional costs and external costs in cross-regional SWRMA negotiations. Based on these results, this study provided the following suggestions: the river chief and local authorities of RCS should be stakeholders; the major members of RCS should be the local authorities influenced mostly by SWRMA quantities; RCS should actively advertise the benefits and the cost-down of SWRMA.