In China, the responsibilitY of protecting the environment lies largely with local governments. Within the framework of spatial econometrics, we investigate empirically the consequence of such an institutional setting...In China, the responsibilitY of protecting the environment lies largely with local governments. Within the framework of spatial econometrics, we investigate empirically the consequence of such an institutional setting. Using city-level data for China, the present study finds that city governments behave strategically in making spending decisions regarding environmental protection. This paper finds that a city government appears to cut its own spending as a response to the rise in environmental protection spending by its neighbors. Hence, environmental protection tends to be underprovided. As a result, we suggest that centralizing the environmental protection responsibility to a higher level of government would be beneficial in terms of controlling pollution in China.展开更多
基金supported by the Fundamental Research Funds for the Central Universitiesthe Research Funds of Renmin University of China (11XNL009)
文摘In China, the responsibilitY of protecting the environment lies largely with local governments. Within the framework of spatial econometrics, we investigate empirically the consequence of such an institutional setting. Using city-level data for China, the present study finds that city governments behave strategically in making spending decisions regarding environmental protection. This paper finds that a city government appears to cut its own spending as a response to the rise in environmental protection spending by its neighbors. Hence, environmental protection tends to be underprovided. As a result, we suggest that centralizing the environmental protection responsibility to a higher level of government would be beneficial in terms of controlling pollution in China.
