Challenging the nexus of power: The gaming dilemma of collaboration between government and enterprises in environmental management

Abstract

This study presents a novel approach to analysing environmental governance by Chinese governments through the lens of a tripartite evolutionary game model. The key novelty of our research lies in the explicit incorporation of a reputation mechanism into the evolutionary game analysis, which significantly influences government decision-making, environmental governance strategies, and the dynamics of the relationship between government and polluting enterprises. By assessing the marginal effects of conventional governance and mobilization-based governance on the environmental mechanism, as well as the collusion behaviours between government and polluting enterprises, our study sheds light on previously unexplored aspects of environmental governance. Our findings indicate that the reputation mechanism plays a crucial role within the evolutionary game system of environmental governance, exerting a substantial impact on government decision-making. Furthermore, we demonstrate that policy interventions, such as increasing the cost of penalties under regulatory policies, can encourage compliance strategies among enterprises. Additionally, our research highlights the high sensitivity of reputation signals towards local government's environmental governance strategies, directly impacting their credibility and influencing the adoption of proactive environmental governance strategies. Moreover, we emphasize the role of the central environmental inspection system as a means to facilitate the transmission of environmental governance pressures between central and local governments, ultimately fostering a green development concept and promoting coordinated development between the economy and ecological civilization. Overall, this study provides valuable insights into the intricacies of environmental governance in China and underscores the importance of reputation mechanisms and policy interventions in promoting sustainable development.