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Centralization or decentralization? the impact of different distributions of authority on China's environmental regulation

Tian, Kun (2021) Centralization or decentralization? the impact of different distributions of authority on China's environmental regulation. Technological Forecasting and Social Change, 173 . Article Number 121172. ISSN 0040-1625. (doi:10.1016/j.techfore.2021.121172) (The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided) (KAR id:100372)

The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided. (Contact us about this Publication)
Official URL:
https://doi.org/10.1016/j.techfore.2021.121172

Abstract

How to balance the central government and local governments’ political authority relating to environmental governance has long been a topic of intense debate in China. Since both environmental and economic regulations are regulatory tools of governments, political authority and systems must be considered in deciding to what extent to empower local governments. Central government needs to find a tradeoff point when being placed under the dual pressure of environmental protection and maintaining the economic growth rate. Based on a two-level principal–agent model, our research compares the effects of centralized and decentralized governance on the efficiency of environmental regulation. Our results suggest that under decentralized environmental governance, the local governments’ incentives increase, which results in either “race to the top” or “race to the bottom” competition in environmental regulation. Moreover, such governance prompts local governments to reduce their investment in economic development and environmental protection. However, decentralization in environmental governance will become more beneficial to the central government if the benefits of reducing information asymmetry surpass enhanced agency costs; otherwise, centralized environmental governance is preferred. Our research proposes a hybrid model of centralized and decentralized environmental governance to help cushion firms against high agency costs and local government–firm collusion.

Item Type: Article
DOI/Identification number: 10.1016/j.techfore.2021.121172
Uncontrolled keywords: Centralization of authority, Decentralization, Environmental protection2,Economic growth,Two-level principal–agent model
Subjects: H Social Sciences
Divisions: Divisions > Kent Business School - Division > Department of Marketing, Entrepreneurship and International Business
Funders: Ministry of Education of the People's Republic of China (https://ror.org/01mv9t934)
National Natural Science Foundation of China (https://ror.org/01h0zpd94)
Depositing User: Kun Tian
Date Deposited: 08 Mar 2023 06:51 UTC
Last Modified: 04 Mar 2024 18:08 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/100372 (The current URI for this page, for reference purposes)

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