Third-party Governance Research Articles

A study on the evolutionary game theory of third-party governance of environmental pollution based on the quasi-co-owned relationship of pollution rights

The third-party governance of environmental pollution and the pollution rights trading system are two typical examples of modern environmental governance systems. In China, the quasi-co-owned relationship of pollution rights between pollution-discharging and pollution-control enterprises is the link through which to achieve synergy between the two factors. To explore how to achieve such synergy, first, the “principle of no-fault liability” is introduced, and the responsibilities of pollution-discharging enterprises and pollution-control enterprises are defined. Second, based on the quasi-co-owned relationship of pollution rights, a revenue-sharing mechanism for pollution rights trading is designed. Finally, a tripartite evolutionary game model consisting of pollution-discharging enterprises, pollution-control enterprises and local governments is constructed, and numerical simulation is performed. The results are as follows. 1) By setting a reasonable market trading price for pollution rights, a reward and punishment distribution coefficient, an improvement in reputation gains, and a saving in pollution rights indicators become conducive to the formation of cooperative relationships between pollution-discharging and pollution-control enterprises, for which the reasonable range of the reward and punishment distribution coefficient is (0.3, 0.4]. 2) Regardless of whether a government subsidy is provided, the optimal range of the revenue-sharing coefficient from pollution rights trading is [0.5, 0.6]. 3) When a government subsidy is withdrawn, increasing the market trading price and surplus indicators of pollution rights can promote the stable operation of the third-party governance model. 4) An increase in policy support and administrative accountability of higher levels of government and a reduction in supervision costs for local governments can help these parties effectively avoid addressing the absence of local government supervision. It is recommended that third-party governance enterprises participate in pollution rights trading to implement the main responsibilities of pollution-discharging and pollution-control enterprises and to set a reasonable revenue-sharing coefficient and reward and punishment distribution coefficient of pollution rights.

Who Does the Public Blame for Inequities in Public Service Provision? Examining the Effect of Contracting and Cost Information in a Survey Experiment

Research assessing blame attribution in third-party governance views public service performance as a function of efficiency and effectiveness but overlooks equity. We address this gap in the literature by asking two questions: (1) Does contracting out lessen the blame assigned to the government for inequitable service provision? and (2) Is the public less critical of inequitable service provision when told it results in greater efficiency? To answer these questions, a survey experiment was conducted using a representative sample of United States residents (n = 1034). The results show that, while the government still bears responsibility for inequitable service provision, contracting out diminishes some of the responsibility placed on the government, shifting it toward the contractor instead. In addition, citizens’ blame attribution patterns do not change when told inequitable service provision results from efforts to improve efficiency, which suggests that the public does not excuse inequitable service provision even when told it saves money. The findings of this study contribute to the understanding of blame dynamics in third-party governance and bring implications to democratic accountability.

The contagion mechanism and governance strategy of corporate social irresponsibility of Chinese food companies

From a global perspective, the incidents of food fraud are still increasing in recent years, which shows that the food safety issue has not been well addressed. As a major world food exporter and importer, egregious incidents of corporate social irresponsibility (CSI) for domestic food companies were discovered in China. Although the Chinese government has been strengthening the supervision on food companies, the governance effect is not obvious. This research focuses on the governance of the CSI behavior of food companies. As opposed to the existing literature based on Neoclassical economics, this article analyzes food companies' CSI by applying a behavioral economic framework. The system dynamics method is used to analyze the implementation effect of the corresponding governance strategy. Researchers discovered that the short-sighted cognitive bias of food companies is the primary reason for CSI, which results in the self-reinforcing effect and interactive contagion effect. Under the current imperfect institutional environment, these effects will be further amplified to present a crisis of collective irresponsibility. This study provides timely evidence and significant regulatory implications for the ongoing food safety crisis in China. In order to control the contagion of CSI in the food industry, the government should increase its sanctions on irresponsible food companies from the short-term perspective. The government should also establish a fair and standardized market competition order and improve the information disclosure mechanisms and third-party governance mechanisms in the long term. These actions will contribute to a more comprehensive research perspective on food safety governance and, additionally, and to develop more targeted strategic tools for the government to regulate the food market. Our insights can also provide a reference for other countries and industries facing similar challenges.

Evolutionary Game Analysis of Risk in Third-Party Environmental Governance

Focusing on the moral hazard of third-party environmental service providers in monitoring and controlling the emission of pollutants by enterprises, this paper takes the third-party governance of environmental pollution under the incentive-and-constraint mechanism as its research object. It also constructs a game model involving emission-producing enterprises producing emissions, third-party environmental service providers, and local governments. Adopting this evolutionary game model, this paper analyzes the mechanism of local government’s role in effectively resolving the moral hazard between emission-producing enterprises producing emissions and third-party environmental service providers by exploring the conditions of spontaneous cooperation between emission-producing enterprises producing emissions and third-party environmental service providers. This paper provides a possible solution to the problem of emission-producing enterprises or third-party environmental service providers stealing and leaking emissions, as well as collusion between the two. The study presents two major findings. (1) There are three possible scenarios of breach of contract: unilateral breach by third-party environmental service providers, unilateral breach by emissions-producing enterprises, and collusion between the two. When a third-party environmental service provider unilaterally breaches a contract, emission-producing enterprises have regulatory responsibilities toward them. In such cases, local governments should reduce the penalties imposed on emission-producing enterprises. This measure would decrease the willingness of these enterprises to allocate a higher proportion of collusion payments to third-party environmental service providers. However, it would simultaneously provide a new avenue through which third-party environmental service providers would gain benefits, thereby increasing their expected gains from collusion. This would create a new game between the two parties, leading to the failure of collusion negotiations. (2) The efficacy of incentive-constraint mechanisms is influenced by the severity of contractual breaches, represented by the magnitude of stealing and leaking emissions. When false emissions reduction is at a high level, increasing the incentives for emission-producing enterprises and third-party environmental service providers cannot effectively prevent collusion; when the level is moderate, incentives for third-party environmental service providers can effectively prevent collusion, but incentives for emission-producing enterprises cannot; when the level is low, increasing the incentives for emission-producing enterprises and third-party environmental service providers can help prevent collusion. (3) When emission-producing enterprises engage in unilateral discharge, if a local government’s incentive for third-party environmental service providers exceeds the benefits it can obtain from regulating the discharged amount, third-party environmental service providers tacitly approve the company’s discharge behavior. However, with the strengthening of local government regulations, emission-producing enterprises tend to engage in more clandestine discharging of pollutants to obtain greater rewards. This practice infringes upon the revenue of third-party environmental service providers, as their earnings are positively correlated with the amount of pollution abated. Third-party environmental service providers no longer acquiesce to corporate emissions theft, resulting in an increase in the probability of the detection of emission-producing enterprises’ illicit discharges; in this way, the behavior of these enterprises is regulated.

Four-party evolutionary game analysis of third-party recycling treatment of livestock and poultry breeding waste

In response to the problem of governmental failure to control livestock and poultry breeding pollution (LPBP) in countries or regions with a large number of small and medium-scale livestock and poultry farmers (SM-LPF), this paper proposes the theory of recycling treatment through the third-party companies (TPC). Firstly, based on the evolutionary game theory, this paper constructs an evolutionary game model with four parties, including SM-LPF, TPC, the consuming party (TCP) and the local government (TLG) into the same analysis framework. And then systematically derives the stability of strategies and possible different combinations of strategies of four parties based on expected utility theory and Lyapunov's first law. Finally, the theoretical derivation results are verified and sensitivity analysis of key parameters is carried out by combining the system dynamics method. The results show that: (1) There is a significant correlation between the four-party game players, and the strategy choice of each game player is influenced by other game players. TLG can promote the benign interaction of the four game players to achieve the desired evolutionary results of Scenario 3 (cooperation, investment, purchase, promotion) through the formulation of reasonable subsidy and reward and punishment mechanisms. (2) The main factors affecting the third-party recycling treatment include government regulation, internal factors, market demand for environmental protection services, and market demand for organic fertilizers. (3) TLG subsidies to SM-LPF have the greatest impact on the evolution of the system, and subsidies to other game players have less impact on the evolutionary results of the system, while it is found that there is an optimal interval for the proportion of local government subsidies to farmers, beyond which the system will be unstable. This study provides practical guidance and policy reference for promoting the participation of TPC in LPBP management and has theoretical and practical value for establishing mechanism of livestock and poultry breeding waste recycling. It also enriches and develops the theory of third-party governance.

The environmental and economic utility of the third-party governance of environmental pollution in China—an analysis based on the business registration information of enterprises

The third-party governance of environmental pollution (TEG) is a market-oriented mechanism designed to attract social capital to participate in ecological environmental protection. Can this mechanism result in positive and significant environmental and economic effects in developing countries? This paper examines the practical effectiveness of China’s pollution governance system reform by analyzing data on the registered business capital of the environmental protection industry in 285 prefecture-level cities during the period of 2003–2019. The study finds the following: TEG can effectively curb urban pollution emissions and improve the urban green total factor productivity (GTFP) of cities; heterogeneity analysis shows that specialization, marketization, and enterprise nature exert important impacts on its effectiveness; mechanism analysis shows that TEG can restrain pollution emissions by strengthening the tendency toward urban green technology progress; and its effects of releasing the industrial production capacity can be leveraged to improve the quality of economic development.

Third-Party Governance of Groundwater Ammonia Nitrogen Pollution: An Evolutionary Game Analysis Considering Reward and Punishment Distribution Mechanism and Pollution Rights Trading Policy

With the acceleration of Chinese industrialization, industrial wastewater is discharged in large quantities, leading to a groundwater environment with high ammonia nitrogen characteristics in many places, which seriously endangers people’s health and makes the treatment of ammonia nitrogen by enterprises an urgent issue. Therefore, based on the principle of “no-fault responsibility”, this paper combines China’s pollution trading rights policy and the reward and punishment distribution mechanism to provide a three-party governance model for groundwater ammonia nitrogen treatment under the benefit sharing of emissions trading. By constructing a tripartite evolutionary game model of groundwater ammonia nitrogen pollution treatment among sewage discharge enterprises, third-party governance enterprises and local governments, the role mechanisms of the strategic choices of different participating actors are analyzed. Finally, the validity of the model is verified via simulation, and the influence of key variables on the evolutionary stability of the system and the strategic choices of the participating parties under different situations are discussed. The research results show that setting reasonable reward and punishment allocation coefficients is the basis for promoting active pollution treatment among sewage discharge enterprises and third-party governance enterprises; a change in pollution rights trading revenue is a key factor affecting the strategic choices of the three parties; sewage discharge enterprises show stronger revenue sensitivity than third-party governance enterprises; and an environmental treatment credit system built by the government can effectively enhance the enthusiasm of enterprises to control pollution. Based on the research results of this paper, the participation of third-party governance enterprises in pollution rights trading is explored, which effectively promotes enterprises to actively carry out groundwater ammonia nitrogen treatment and provides a reference for the government to improve the construction of a sustainable development system for the water environment.

Analysis of Strategy Selection in Third-Party Governance of Rural Environmental Pollution

In the context of increasingly prominent rural environmental problems, the third-party pollution governance model has become an important initiative for the comprehensive governance of rural environmental problems in China. However, the current third-party governance initiatives continue to suffer from governance failures caused by unclear responsibility sharing and opportunistic behavior. To analyze the reasons behind the behavioral choices of the various stakeholders involved in rural environmental third-party governance and to provide policy insights for formulating more reasonable rural environmental third-party governance solutions, a game model was constructed between local governments and third-party governance institutions. Specifically, the model examined the different evolutionary game strategies that appear between local governments and third-party governance institutions in different institutional design contexts when responsibility disputes arise in third-party governance. These disputes involve the re-governing of pollution control responsibility, which can be borne either by the local governments or the party causing the damage. The results shown are as follows: It is crucial to define the boundaries of re-governance responsibility in the third-party governance of rural environmental pollution. When local governments bear the primary responsibility for governance, regardless of whether they provide regulatory oversight, third-party governance institutions tend to adopt a passive approach. In such cases, the third-party governance market fails to effectively fulfill its role in governance. By reconstructing the third-party governance market model and dividing the main responsibility for pollution governance among the damaging parties, it is possible to achieve active governance by third-party governance institutions without the need for regulation by local governments.

Evolutionary Game and Simulation Analysis of Participating Subjects in Remediation of Heavy Metal Contaminated Cultivated Land under the Ladder Multiple Supervision Model

The heavy metal pollution of cultivated land in China is severe, requiring remediation. Introducing third-party governance subjects representing market resources is inevitable to realize the specialization and socialization of cultivated land remediation. However, due to the public nature of cultivated land, the confusion about participating parties’ responsibilities and difficulty coordinating interests restrict the expected effect of cultivated land remediation. To this end, a three-party evolutionary game model among the grassroots government, governance enterprises, and supervisory enterprises is constructed and virtually simulated, taking into account the influence of random checks by the higher-level government. We found that the reward and punishment mechanism of the grassroots government, the frequency of random inspection by the higher-level government, and the amount of deduction will influence the strategy selection of the participating parties. Strengthening the awareness of the responsibility of the grassroots government, optimizing the incentive system, establishing a regular spot-check system, and improving the cost of non-compliance by enterprises can effectively resolve conflicts of interest among the participants. The study results have practical significance for further enhancing the remediation efficiency of heavy metal-contaminated cultivated land.

Reaching Back: Convict Leasing and the Trusty System in the Nineteenth Century

Reaching Back: Convict Leasing and the Trusty System in the Nineteenth Century

Comparison of Regional Urban Water Pollutants Emission Standards and Determination of Factors Influencing Their Integration—A Case Study of the Biopharmaceutical Industry in the Yangtze River Delta Urban Agglomeration

Urban pharmaceutical industries are responsible for high intensity emissions of water pollutants. The regional water pollutant emission standards vary greatly throughout the Yangtze River Delta Urban Agglomeration (YRDUA) in China, which, to some extent, results in increased risks and hidden dangers to regional water environment safety, especially water quality. Under the national strategy of Yangtze River Delta ecological and green integration development, a unified standard of water pollutant emissions should be integrated into the integration development process, but differences between characteristic items, concentration limits, and conditions among four local standards of water pollutant emission have become a key influencing factor in their integration in industry and in green transformation. When comparing the water pollutant emission standards of the biopharmaceutical industry in three provinces and one municipality of the YRDUA, the factors influencing integration were determined and caused by the main differences in local water pollutant emission standards, namely, the race to the bottom of the biopharmaceutical industry, the inconsistency of environmental protection regulation law, and transboundary water pollution risks. From the perspective of urban water quality safety, we propose the following strategies for promoting the integration of water pollutant emission standards in the YRDUA: (1) increasing government funding for local water pollution governance and encouraging industries to adopt the third-party governance model for pollution control in the YRDUA; (2) unifying water pollutant emission standards and environmental law enforcement standards in the YRDUA with a mechanism involving shared economic responsibility; and (3) establishing a platform for sharing data and governance performance for the emission of water pollutants in the YRDUA.

An integrated trading platform for construction and demolition waste recovery in a circular economy

Abandoned materials and substances generated during construction, renovation, and demolition activities are collectively referred to as construction and demolition (C&D) waste. Inert C&D waste materials, such as sub-soil, sand, stone, and concrete, could be either directly reused on another construction site or recycled. Therefore, real-time information about site locations, dates, categories, prices, etc. provided on a centralized strategic platform would make an efficient and effective contribution to the reuse of C&D waste and could consequently reduce the overall trading and social cost of construction. The so-called ‘platform economy’ has proved to be transformational in upgrading many industries and has already changed people's way of life and ways of trading. However, the research and practice of platform-based information to transform and upgrade the construction industry has lagged far behind other industries. This study, therefore, investigated the feasibility of providing a trading platform for C&D waste as an integrated and effective strategy for current practices of C&D waste management and resource recovery in China and proposes theoretical models based on platform economy theory and third-party governance. A timed Petri net was used to model and analyze the traditional transaction process and the platform transaction process of C&D waste. By comparing the time delay of two kinds of the transaction process, the superior efficiency of the platform was revealed. The paper concludes with the main findings, and provides policy implications and future directions.

Reform and Analysis of the Division of Legal Responsibility between Enterprises and Third-Party Governance under Environmental Pollution.

This paper aims to deeply analyze the relevant concepts of the third-party responsibility for environmental pollution control of enterprises and further clarify the legal responsibility and responsibility distribution of the third-party environmental pollution control. Through the analysis of enterprise environmental pollution sample data, this paper finds that the judicial application of enterprise environmental pollution crime in China mainly includes the number of cases increases year by year and the subjects of enterprise environmental pollution crime are relatively concentrated. The results show that the joint crime accounts for about 40%, and unit crime cases account for about 10%, while the amount of fines for natural persons in the existing laws is mostly less than 50,000 yuan, which is relatively low. Finally, it is concluded that the criminal punishment of enterprise environmental pollution is relatively light, especially in the accountability of the criminal subject. Therefore, this paper focuses on the division of legal liability from three aspects: civil liability, administrative liability, and criminal liability.

Performance-Influencing Factors and Improvement Paths of Third-Party Governance Service Regarding Environmental Pollution—An Empirical Study of the SEM Based on Shanghai Data

By employing ecological economics involving performance-influencing factors and third-party governance services that have the aim of reducing environmental pollution, a theoretical framework which includes object, subject, process that measures the performance of such services is analyzed on the basis of the idea of sustainability science (2.0). The research hypotheses regarding the relationships among service performance, multi-stakeholder subjects’ satisfaction, and the effect of process management are put forward; then, a three-dimensional performance measurement model, which includes performance, stakeholders, and the process of providing third-party governance services for addressing environmental pollution, is constructed based on the pressure–state–response (PSR) driving force model. At the same time, based on empirical data of the Shanghai municipality, the structural equation model (SEM) is used to empirically test the nine proposed research hypotheses. The empirical test results show that, except for the research hypotheses in regard to regulating variables and controlling variables, all of the research hypotheses passed the test. It means the direct performance, single subjective satisfaction, process management effects are performance-influencing factors. However, the stakeholders’ cooperation satisfaction partially influences the performance of third-party governance services regarding environmental pollution. Finally, through theoretical and empirical research, this paper proposes countermeasures and suggestions for improving the performance of third-party governance services regarding environmental pollution in Shanghai focusing on two aspects: one is the market governance mechanism innovation, and the other is regulations and standards innovation.

Accountability in Government Contracting Arrangements: Experimental Analysis of Blame Attribution Across Levels of Government

While governments increasingly turn to third-party providers to deliver public services and government responsibilities are increasingly shifted from the federal to the state and local levels, both contracting and the division of powers under federalism blur lines of accountability. Because recent experiments on blame shifting find mixed results and citizens have different expectations of federal, state, and local government, we ask the following: How does blame attribution in third-party governance compare across levels of government? To address this question, we employ a timely survey experiment to examine who is responsible for a prisoner’s death in the case of interstate prisoner transport, which is one of the few services that is provided across all levels of government and by government contractors. The results show that contracting reduces the level of blame attributed to the government and that blame for contract failures varies by the level of government. Across levels of government, we find the local government sees the largest reduction in blame by contracting out. Findings have implications for accountability in contracting arrangements in public safety contexts.

Study on the Construction of a New Third-Party Governance Model for Environmental Pollution

In recent years, China’s environmental pollution control focuses on public participation. As an important measure of pollution control, the marketization and specialization of pollution control is a historical trend. Some scientific research institutes and environmental protection enterprises have begun to practice the third- party governance system. Looking at the practical effect, there are many deficiencies in the current third-party governance model, mainly for the lack of promotion power of the third-party governance model, the imperfect third-party governance supervision system, and the inability to distinguish the scope of responsibility between the main body of pollutant discharge and the main body of pollution control. In this paper, from the perspective of “operation mechanism, legal relationship and central subject”, the paper creatively constructs the “three-in-one” third-party governance mode to effectively solve the problem of responsibility definition between the pollutant discharge, pollution treatment subject and the government.

Multi-Evolutionary Game Research on Heavy Metal Pollution Control in Soil: Based on a Third-Party Perspective

The introduction of third-party governance models for the treatment of soil heavy metal pollution has promoted the marketization, professionalization, and efficiency of pollution treatment, but also can result in distortions of relevant stakeholder relationships and conflicts of interest. The game relationship among the government, soil-polluting companies, and third-party governance companies may solve the practical dilemma of comprehensive management of soil heavy metal pollution and establish a good cooperative mechanism. We constructed a three-party evolutionary game model to analyze the interaction mechanism of each agent’s strategy choice as well as the evolution of each agent’s strategy choice under different parameter trends and simulation analyses. The research showed that the amount of fines and supervision costs, rent-seeking costs and governance costs, and government subsidies and rent-seeking benefits were key factors affecting the evolution and stability strategies of government departments, soil-polluting companies, and third-party governance companies. By cooperating with third-party governance companies, the government can effectively suppress the improper behavior of soil-polluting companies. The conclusions of the study are helpful to broaden the research boundary of soil heavy metal pollution treatment and provide theoretical guidance for the treatment of soil heavy metal pollution in China.

Regional Market Characteristics and Integrating Mechanism of Environmental Pollution Third-Party Governance Service in China

The market integrating mechanism of environmental pollution third-party governance service in the Yangtze River Delta of China will promote the integration level of the whole regional ecological environment governance. In this paper, based on analysis of environmental pollution third-party governance situations, and market characteristics of integration in Yangtze River Delta, firstly, the market integrating level of environmental pollution third-party governance service in this region would be scientifically measured by using market integration indicators extracted from integrating evaluation index system of Yangtze River Delta. Secondly, three constructing factors which aspect regional market behaviors of environmental pollution third-party governance service should be found after analyzing the root causes, including constructing recognition mechanism for local pollution emission compliance standard and environmental service industry standard in Yangtze River Delta, constructing corporation mechanism for multiple subjects of environmental pollution third-party governance service, and constructing unite regionally environmental regulatory enforcement procedures in this region. Thirdly, according to the Structure-Behavior-Performance (SCP) analysis paradigm of industrial economics, the market integrating construction paths of environmental pollution third-party governance in the Yangtze River Delta are proposed. Finally, the paper discusses the strategies of constructing market integrating mechanism for environmental pollution third-party governance service in Yangtze River Delta.

Effectiveness evaluation on third-party governance model for environmental pollution in China.

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.

Evolutionary game analysis for third-party governance of environmental pollution

Environmental pollution in China presents complex features include regional, agglomeration, periodicity, diversity and multiple. The government-led environmental pollution control mode has been unable to adapt to the current grim situation, so the inevitable trend of the development of Chinese environmental pollution governance system is the third-party governance with diversified participation. The tripartite evolutionary game model is built, including the governments, environmental services companies and pollutant discharging enterprise, and the key factors affecting the dynamic evolution of game equilibrium are explored. Then, the effects of third-party governance punishment strategy of environmental pollution under multiple scenarios and the stable equilibrium points are also discussed. Results are show as follow: (1) the “public-private-partnership” mode is the key point to increase the environmental public interest in the process of achieving economic benefits; (2) The government can not only take punishment as the main regulatory measures, but also need to establish a contractual “public and private” governance system. At the same time, government should establish governance authority and fulfill the roles and responsibilities of the coordinator, guider and supervisor; (3) the implementation of government supervision must be combined with Chinese economic and society development and environmental pollution, and guided by marketization, legalization, specialization, and industrialization. According to the degree of perfection of the system of third-party governance of environmental pollution, the penalties for illegal actions are dynamically adjusted in time. It is necessary to push the choice of “private subject” to public rationality, so as to guide environmental pollution control to Chinese good governance.