The role of fiscal decentralization and natural resources markets in environmental sustainability in OECD

Bang-yong, HU; Guo, Mingxiao; Zhang, Shuwen

doi:10.1016/j.resourpol.2023.103855

Cited by 5 publications

(4 citation statements)

References 42 publications

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“…Fiscal decentralization can lead to financial resource inefficiency, undermining economic effectiveness and hindering the region's environmental sustainability efforts. The promotion and appraisal mechanism of fiscal decentralization has induced some local governments to blindly expand and repeat construction to achieve rapid short-term economic growth [53,54]. This has greatly diminished the capacity of local governments to advance green economic development due to the wastage of resources.…”

Section: Exploring the Mechanism And Hypothesis Behind The Negative I...mentioning

confidence: 99%

Analyzing Green Growth Efficiency in China and Investigating the Spatial Effects of Fiscal Decentralization: Case Study of Prefecture-Level Cities

Li,

Bai

2024

Sustainability

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Due to inadequate resource availability and environmental contamination, the Chinese government has placed a high priority on ecological civilization in recent years. Emphasis has been placed on the environmentally friendly conversion of the economy and the sustainable progress of society. China has established a fiscal decentralization system that divides financial responsibilities between the central and local governments. Due to their proximity advantage, local governments, as agents of the central government, can effectively deliver public services, optimize resource allocation, encourage innovation in green science and technology, and facilitate green growth in the region. However, local governments may exhibit myopic behaviors that impede the sustainable development of the region in their pursuit of regional growth ambitions. Therefore, this paper aims to investigate whether the institutional factor of fiscal decentralization promotes or inhibits the efficiency of green development in China. Using data from Chinese prefecture-level cities between 2010 and 2020, this paper presents the SBM-DDF model to measure the green growth efficiency (GGE) in cities. The study then analyzes the spatial impact of fiscal decentralization on GGE using a dynamic panel model and a dynamic SAR model. The empirical results show that China’s green development level has steadily increased in recent years, and GGE reflects climbing pressure and regional differences. Secondly, increasing the vertical fiscal decentralization of local governments promotes GGE growth, while increasing fiscal freedom hinders it. Additionally, fiscal decentralization in neighboring cities also affects local GGE, with spatial spillover effects. Finally, the impact of fiscal decentralization on GGE is spatio-temporally heterogeneous. This paper expands on the research regarding the factors that affect the efficiency of green growth in China, specifically focusing on institutional factors at a theoretical level. Additionally, this paper provides targeted policy recommendations based on the aforementioned findings. These recommendations hold great practical significance for China in improving its fiscal decentralization system and achieving sustainable economic development.

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Section: Exploring the Mechanism And Hypothesis Behind The Negative I...mentioning

confidence: 99%

Analyzing Green Growth Efficiency in China and Investigating the Spatial Effects of Fiscal Decentralization: Case Study of Prefecture-Level Cities

Li,

Bai

2024

Sustainability

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“…Studying fiscal policy in the Indonesian forestry sector, the researchers discovered legislation pertaining to local government authority and forest protection that was deemed improper and exhibited contradicting elements. Hu et al (2023) [28] raise the importance of fiscal decentralization to strengthen the natural resources markets. By reviewing the existing body of literature, the following hypothesis can be developed.…”

Section: Fiscal Decentralization and Forest Resource Efficiencymentioning

confidence: 99%

“…Local governments invest in technology, education, and infrastructure that can enhance forest resource efficiency. By linking technology with forest resource efficiency, fiscal decentralization can enable local communities to harness the power of data-driven approaches, promoting sustainable forest management practices and ensuring the long-term vitality of forest resources [28,29].…”

Section: Introductionmentioning

confidence: 99%

The Impact of Technological Dynamics and Fiscal Decentralization on Forest Resource Efficiency in China: The Mediating Role of Digital Economy

Yasmeen,

Hao,

Yan

et al. 2023

Forests

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This study explores the multi-dimensional relationships between technology, fiscal decentralization, and forest resource efficiency, and the pivotal role played by the digital economy as a mediator in 2002–2020. First, this study evaluates the Chinese provinces’ forest resource efficiency using multi-dimensional inputs and outputs of forest sectors. Further, we use two sorts of technology: high-technology expenditure and forest technology education. Fiscal decentralization in terms of local government expenditure on forest resources makes the study innovative and richer in analysis. A SBM-DEA analysis showed that the Anhui, Beijing, Jiangsu, Shanghai, and Zhejiang provinces have the highest efficiency scores, implying very efficient forest resource management. Subsequently, the robust econometric estimator Driscoll and Kraay is applied. The study’s findings disclose that both dimensions of technology increase the Chinese provinces’ forest resource efficiency through technological expenditure and forest technology education. Fiscal decentralization towards forest resource management expenditure increases the efficiency of forests. Urbanization and economic development reduce the efficiency of forests. The digital economy can effectively help to improve the efficiency of forest resources. The presence of moderating effects reveals that the influence of the digital economy on forest resource efficiency is positive when it is coupled with economic development, fiscal decentralization, technology, and urbanization.

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“…Since reform and opening up, China has made remarkable achievements in economic growth and people's living standards have improved significantly. However, due to the mismatch between the financial and administrative powers of the central and local governments, China's basic public services still have the problems of insufficient supply quantity, unbalanced structure and low efficiency [ 1 ]. In particular, the quality of public services in non-economic areas such as basic education, medical and health care, and social security needs to be improved.…”

Section: Introductionmentioning

confidence: 99%

Impact of fiscal decentralization and local government competition on the supply of basic public services: Based on the empirical evidence of prefecture-level cities in China

Wang,

Huang,

Zhang

et al. 2024

Heliyon

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The role of fiscal decentralization and natural resources markets in environmental sustainability in OECD

Cited by 5 publications

References 42 publications

Analyzing Green Growth Efficiency in China and Investigating the Spatial Effects of Fiscal Decentralization: Case Study of Prefecture-Level Cities

Analyzing Green Growth Efficiency in China and Investigating the Spatial Effects of Fiscal Decentralization: Case Study of Prefecture-Level Cities

The Impact of Technological Dynamics and Fiscal Decentralization on Forest Resource Efficiency in China: The Mediating Role of Digital Economy

Impact of fiscal decentralization and local government competition on the supply of basic public services: Based on the empirical evidence of prefecture-level cities in China

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