Environmental decentralization, local government competition, and regional green development: Evidence from China

Abstract

Environmental management systems may play an important role in environmental pollution control. Given China's rapid economic development and increases in environmental pollution, this study attempts to study how environmental decentralization and local government competition affect China's regional green development. To show the green development degree of different provinces in China, the super-efficiency SBM-undesirable model is used to calculate the green total factor productivity of 30 provinces in China from 2005 to 2016. The panel vector autoregressive model (PVAR) is employed to empirically test the impact of environmental decentralization on regional green development. The dynamic threshold panel model is also used to analyze the possible nonlinear relationship between environmental decentralization and regional green development under different levels of local government competition. The results indicate that environmental decentralization and environmental administrative decentralization play significant roles in promoting regional green development, but environmental supervision decentralization and environmental monitoring decentralization have negative impacts on regional green development. The joint effect of local government competition and environmental decentralization produces the “race to bottom” effect, which reduces the efficiency level of regional green development. With the continuous strengthening of local government competition, the role of environmental decentralization in promoting regional green development efficiency decreases gradually. In addition, the relationship among environmental decentralization, local government competition, and regional green development differs across Chinese different regions.