IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v11y2019i16p4434-d258230.html
   My bibliography  Save this article

Does Fiscal Policy Promote Third-Party Environmental Pollution Control in China? An Evolutionary Game Theoretical Approach

Author

Listed:
  • Caihua Zhou

    (Institute of Ecological Civilization, Jiangxi University of Finance and Economics, Nanchang 330013, China
    School of Public Finance and Public Administration, Jiangxi University of Finance and Economics, Nanchang 330013, China)

  • Hualin Xie

    (Institute of Ecological Civilization, Jiangxi University of Finance and Economics, Nanchang 330013, China)

  • Xinmin Zhang

    (Institute of Ecological Civilization, Jiangxi University of Finance and Economics, Nanchang 330013, China)

Abstract

To promote third-party environmental pollution control in China, it is necessary to dissect the mechanism of fiscal policy in third-party environmental pollution control. This study first discusses the acting paths of fiscal policies on third-party environmental pollution control in theory. A tripartite evolutionary game model involving the local government, the polluting enterprise, and the third-party enterprise is established. The replicator dynamics, evolutionary stability strategies, and numerical simulation of the behavior of the three participants are analyzed to further study the acting mechanism of fiscal policy in third-party environmental pollution control. In addition, the influences of other parameters on the implementation of third-party environmental pollution control are evaluated. The results show that the behaviors of the local government, the polluting enterprise, and the third-party enterprise influence each other. Furthermore, strengthening the relevant fiscal policy, reducing the risks of the polluting enterprise and third-party enterprise, and improving the benefit to the local government are conducive to promoting third-party environmental pollution control in China. Based on these results, this study proposes the following policy implications: formulating fiscal policies for third-party environmental pollution control, implementing fiscal policies in a dynamic and progressive manner, improving the market mechanism of third-party environmental pollution control, and strengthening the environmental performance assessment of the local government.

Suggested Citation

  • Caihua Zhou & Hualin Xie & Xinmin Zhang, 2019. "Does Fiscal Policy Promote Third-Party Environmental Pollution Control in China? An Evolutionary Game Theoretical Approach," Sustainability, MDPI, vol. 11(16), pages 1-18, August.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:16:p:4434-:d:258230
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/11/16/4434/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/11/16/4434/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. James Alm & H. Spencer Banzhaf, 2012. "Designing Economic Instruments For The Environment In A Decentralized Fiscal System," Journal of Economic Surveys, Wiley Blackwell, vol. 26(2), pages 177-202, April.
    2. Long, Xianling & Ji, Xi, 2019. "Economic Growth Quality, Environmental Sustainability, and Social Welfare in China - Provincial Assessment Based on Genuine Progress Indicator (GPI)," Ecological Economics, Elsevier, vol. 159(C), pages 157-176.
    3. Daniel Friedman, 1998. "On economic applications of evolutionary game theory," Journal of Evolutionary Economics, Springer, vol. 8(1), pages 15-43.
    4. Ritzberger, Klaus & Weibull, Jorgen W, 1995. "Evolutionary Selection in Normal-Form Games," Econometrica, Econometric Society, vol. 63(6), pages 1371-1399, November.
    5. Li, Hongbin & Zhou, Li-An, 2005. "Political turnover and economic performance: the incentive role of personnel control in China," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1743-1762, September.
    6. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64(5), pages 416-416.
    7. Yongzheng Liu & Jorge Martinez-Vazquez, 2015. "Public Input Competition under Stackelberg Equilibrium: A Note," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 17(6), pages 1022-1037, December.
    8. Sigman, Hilary, 2003. "Letting States Do the Dirty Work: State Responsibility for Federal Environmental Regulation," National Tax Journal, National Tax Association;National Tax Journal, vol. 56(1), pages 107-122, March.
    9. Friedman, Daniel, 1991. "Evolutionary Games in Economics," Econometrica, Econometric Society, vol. 59(3), pages 637-666, May.
    10. Xie, Hualin & Wang, Wei & Zhang, Xinmin, 2018. "Evolutionary game and simulation of management strategies of fallow cultivated land: A case study in Hunan province, China," Land Use Policy, Elsevier, vol. 71(C), pages 86-97.
    11. Abdessalam, A. H., 2014. "Tax competition and the determination of the quality of public goods," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 8, pages 1-20.
    12. Fuyuan Wang & Kaiyong Wang, 2017. "Assessing the Effect of Eco-City Practices on Urban Sustainability Using an Extended Ecological Footprint Model: A Case Study in Xi’an, China," Sustainability, MDPI, vol. 9(9), pages 1-16, September.
    13. Zenglian Zhang & Wenju Zhao, 2018. "Research on Financial Pressure, Poverty Governance, and Environmental Pollution in China," Sustainability, MDPI, vol. 10(6), pages 1-24, June.
    14. Lingguang Li & Weixin Yang, 2018. "Total Factor Efficiency Study on China’s Industrial Coal Input and Wastewater Control with Dual Target Variables," Sustainability, MDPI, vol. 10(7), pages 1-22, June.
    15. Weixin Yang & Lingguang Li, 2017. "Energy Efficiency, Ownership Structure, and Sustainable Development: Evidence from China," Sustainability, MDPI, vol. 9(6), pages 1-26, June.
    16. Glazer, Amihai, 1999. "Local regulation may be excessively stringent," Regional Science and Urban Economics, Elsevier, vol. 29(5), pages 553-558, September.
    17. A.H. Ould Abdessalam & Eric Kamwa, 2014. "Tax Competition and the Determination of the Quality of Public Goods," Post-Print halshs-01101985, HAL.
    18. Wallace E. Oates & Robert M. Schwab, 2015. "The Window Tax: A Case Study in Excess Burden," Journal of Economic Perspectives, American Economic Association, vol. 29(1), pages 163-180, Winter.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Qiao Peng & Yao Xiao, 2020. "Will Third-Party Treatment Effectively Solve Issues Related to Industrial Pollution in China?," Sustainability, MDPI, vol. 12(18), pages 1-15, September.
    2. Laura Vidal-Hernández & Diana de Yta-Castillo & Blanca Castellanos-Basto & Marco Suárez-Castro & Evelia Rivera-Arriaga, 2021. "Fiscal Economic Instruments for the Sustainable Management of Natural Resources in Coastal Marine Areas of the Yucatan Peninsula," Sustainability, MDPI, vol. 13(19), pages 1-20, October.
    3. Ning Cui & Jiaxuan Li & Jun Tu & Maochun Zhou, 2022. "Evolutionary Game Analysis of Non-Governmental Organizations Participating in Garbage Management under the Background of Internet of Things," Sustainability, MDPI, vol. 14(20), pages 1-21, October.
    4. Caihua Zhou, 2021. "Game Theory-Based Analysis of Local Governments’ Behavioral Dissimilation in the Third-Party Soil Pollution Control under Chinese-Style Fiscal Decentralization," Land, MDPI, vol. 10(4), pages 1-20, April.
    5. Caihua Zhou & Xinmin Zhang, 2020. "Measuring the Efficiency of Fiscal Policies for Environmental Pollution Control and the Spatial Effect of Fiscal Decentralization in China," IJERPH, MDPI, vol. 17(23), pages 1-19, December.
    6. Yongming Zhu & Lanxiao Niu & Zheyun Zhao & Jing Li, 2022. "The Tripartite Evolution Game of Environmental Governance under the Intervention of Central Government," Sustainability, MDPI, vol. 14(10), pages 1-19, May.
    7. Songtao Xu & Zhifang Zhou & Ke Liu, 2020. "Multi-Evolutionary Game Research on Heavy Metal Pollution Control in Soil: Based on a Third-Party Perspective," Sustainability, MDPI, vol. 12(13), pages 1-20, June.
    8. Tiangui Lv & Hualin Xie & Hua Lu & Xinmin Zhang & Lei Yang, 2019. "A Game Theory-Based Approach for Exploring Water Resource Exploitation Behavior in the Poyang Lake Basin, China," Sustainability, MDPI, vol. 11(22), pages 1-14, November.
    9. Qianwen Wu & Qiangqiang Wang & Yongwu Dai, 2023. "Analysis of Strategy Selection in Third-Party Governance of Rural Environmental Pollution," Sustainability, MDPI, vol. 15(11), pages 1-19, May.
    10. Ming Luo & Ruguo Fan & Yingqing Zhang & Chaoping Zhu, 2020. "Environmental Governance Cooperative Behavior among Enterprises with Reputation Effect Based on Complex Networks Evolutionary Game Model," IJERPH, MDPI, vol. 17(5), pages 1-18, February.
    11. Xiaoling Xiong & Jizhi Li & Zejian Lin, 2023. "Evolutionary Game and Simulation Analysis of Participating Subjects in Remediation of Heavy Metal Contaminated Cultivated Land under the Ladder Multiple Supervision Model," Sustainability, MDPI, vol. 15(6), pages 1-20, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Caihua Zhou, 2021. "Game Theory-Based Analysis of Local Governments’ Behavioral Dissimilation in the Third-Party Soil Pollution Control under Chinese-Style Fiscal Decentralization," Land, MDPI, vol. 10(4), pages 1-20, April.
    2. Qianwen Wu & Qiangqiang Wang & Yongwu Dai, 2023. "Analysis of Strategy Selection in Third-Party Governance of Rural Environmental Pollution," Sustainability, MDPI, vol. 15(11), pages 1-19, May.
    3. Guitao Qiao & Dan Yang & Mahmood Ahmad & Zahoor Ahmed, 2022. "Modeling for Insights: Does Fiscal Decentralization Impede Ecological Footprint?," IJERPH, MDPI, vol. 19(16), pages 1-18, August.
    4. Millimet, Daniel L., 2013. "Environmental Federalism: A Survey of the Empirical Literature," IZA Discussion Papers 7831, Institute of Labor Economics (IZA).
    5. Zhang, Jiayu & Yang, Xiaodong & Wang, Hao, 2021. "Age-friendly regeneration of urban settlements in China: Game and incentives of stakeholders in decision-making," Land Use Policy, Elsevier, vol. 111(C).
    6. Huang, Xingjun & Lin, Yun & Lim, Ming K. & Zhou, Fuli & Ding, Rui & Zhang, Zusheng, 2022. "Evolutionary dynamics of promoting electric vehicle-charging infrastructure based on public–private partnership cooperation," Energy, Elsevier, vol. 239(PD).
    7. Yunpeng Yang & Weixin Yang, 2019. "Does Whistleblowing Work for Air Pollution Control in China? A Study Based on Three-party Evolutionary Game Model under Incomplete Information," Sustainability, MDPI, vol. 11(2), pages 1-20, January.
    8. Tiangui Lv & Hualin Xie & Hua Lu & Xinmin Zhang & Lei Yang, 2019. "A Game Theory-Based Approach for Exploring Water Resource Exploitation Behavior in the Poyang Lake Basin, China," Sustainability, MDPI, vol. 11(22), pages 1-14, November.
    9. Mary-Françoise Renard & Hang Xiong, 2012. "Strategic Interactions in Environmental Regulation Enforcement: Evidence from Chinese Provinces," CERDI Working papers halshs-00672449, HAL.
    10. Li, Ye & Yang, Tianjian & Zhang, Yu, 2022. "Evolutionary game theory-based system dynamics modeling for community solid waste classification in China," Utilities Policy, Elsevier, vol. 79(C).
    11. Liu, Yang & Cui, Mengying & Gao, Xubin, 2023. "Building up scrap steel bases for perfecting scrap steel industry chain in China: An evolutionary game perspective," Energy, Elsevier, vol. 278(C).
    12. Tan, Yiheng & Huang, Xiying & Li, Wei, 2023. "Does blockchain-based traceability system guarantee information authenticity? An evolutionary game approach," International Journal of Production Economics, Elsevier, vol. 264(C).
    13. Sheng, Jichuan & Webber, Michael, 2017. "Incentive-compatible payments for watershed services along the Eastern Route of China’s South-North Water Transfer Project," Ecosystem Services, Elsevier, vol. 25(C), pages 213-226.
    14. Xin Gao & Juqin Shen & Weijun He & Fuhua Sun & Zhaofang Zhang & Xin Zhang & Liang Yuan & Min An, 2019. "Multilevel Governments’ Decision-Making Process and Its Influencing Factors in Watershed Ecological Compensation," Sustainability, MDPI, vol. 11(7), pages 1-28, April.
    15. Qianru Chen & Hualin Xie & Qunli Zhai, 2022. "Management Policy of Farmers’ Cultivated Land Abandonment Behavior Based on Evolutionary Game and Simulation Analysis," Land, MDPI, vol. 11(3), pages 1-23, February.
    16. Lan Guo & Ling Yang, 2023. "The Corporate Economic Influence and Corporate Social Responsibility: Evidence from China," Sustainability, MDPI, vol. 15(13), pages 1-22, July.
    17. Bowman Cutter, W. & DeShazo, J.R., 2007. "The environmental consequences of decentralizing the decision to decentralize," Journal of Environmental Economics and Management, Elsevier, vol. 53(1), pages 32-53, January.
    18. Sandholm,W.H., 2003. "Excess payoff dynamics, potential dynamics, and stable games," Working papers 5, Wisconsin Madison - Social Systems.
    19. Jin, Tao & Jiang, Yulian & Liu, Xingwen, 2023. "Evolutionary game analysis of the impact of dynamic dual credit policy on new energy vehicles after subsidy cancellation," Applied Mathematics and Computation, Elsevier, vol. 440(C).
    20. Viossat, Yannick, 2008. "Evolutionary dynamics may eliminate all strategies used in correlated equilibrium," Mathematical Social Sciences, Elsevier, vol. 56(1), pages 27-43, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:11:y:2019:i:16:p:4434-:d:258230. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.