Abstract
China's rapid economic growth is accompanied by seriously environmental pollution. It is the primary task of Chinese government to effectively improve the environmental pollution status while maintaining the rapid and stable economic development. As a new environment governance method, this paper analyzes both environmental and economic effect of third-party governance model concerning "the one who makes pollution makes payment". Firstly, Deng grey relational analysis and principal component analysis have been adopted to calculate the environmental governance coefficients and to rank the effect of environmental governance for all sample cities. And the consistency of results of the two methods has been evaluated according to Kendall-W coefficients. The two methods reach the same conclusion that the sample cities adopting the third-party governance model can improve the environmental pollution status more effectively. Secondly, Granger causality test is used to analyze the relationship between the third-party model and economic growth. It is concluded that the third-party governance model could effectively promote economic growth of local cities. Lastly, this paper puts forward some measures and improvement methods to promote the third-party governance model in China.
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