Governance, Environment and Socio-Economic Imperatives
Edited by François Gipouloux
Chapter 8: Choices between development and environmental preservation in Huangshan City
Sustainable development, defined as ‘development that meets the needs of the present without compromising the ability of future generations to meet their own needs’, has become one of China’s national strategies since 1997. However, unsolved environmental problems in past decades have brought attention to the fact that economic development goals had become too dominant in local governmental policy making and environmental goals had often been compromised. The economic growth at the cost of environmental needs to be optimized by enhanced environmental protection (Xia, 2005). Governments are assumed to be competitive with each other and in relations with other suppliers of public goods and services (Breton, 1996). While some studies suggest that intergovernmental competition makes governments more efficient in managing local affairs, others argue that governmental competition may lead to inefficient equilibrium fiscal policy on mobile factors, or even cause a regional ‘race to the bottom’ (Grossman et al., 1999; Lee, 2003; Kunce and Shogren, 2003). Inspired by Western scholars’ studies on competitive local governments, competition among local governments in China has been widely discussed (Zhou, 2004; Pang, 2006; Fu and Zhang, 2007). Domestic studies tend to agree that unbalanced public policy making could lead to insufficient supply of public goods and loose environmental policy (Yang et al., 2008; Liu and Li, 2013). Applying a decentralized fiscal policy, the central government provides incentives to provincial governments by transfer payment of public finance.
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