Research on Implementation Effectiveness of Command-and-Control Environmental Regulations: Evidence from the Basin Ecological Compensation Policy of China

ABSTRACT

Using the Propensity Score Matching (PSM) and Differences-in-Differences (DID) models, this study evaluates the effects of the Basic Ecological Compensation (BEC), an incentivized command-and-control environment regulation formulated by the Weihe River Basin of China for environmental protection, on the comprehensive performance of prefecture-level cities along the Weihe River Basin from 2009 to 2019. Results show that the BEC policy can improve the performance of the Weihe River Basin and that fiscal decentralization has a positive regulatory effect on the policy. We suggest improving compensation mechanisms and standards, appropriately intensifying fiscal decentralization, and popularizing successful experiences of provinces.

KEYWORDS:

• Command-and-control environmental regulations
• Basin ecological compensation
• regional comprehensive performance
• fiscal decentralization

JEL:

• O13
• H11
• Q56

Disclosure statement

The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.

Notes

1. The Guanzhong-Tianshui Economic Zone, approved by the State Council in 2009, includes the Guanzhong Plain in Shaanxi Province and Tianshui City in Gansu Province. The economic zone includes Greater Xi’an (including Xianyang) as the central city, Baoji as the sub-central city, and Tianshui, Weinan, Tongchuan, Shangluo, Yangling, Qingyang, Pingliang, and Longnan as sub-core cities.

2. The cities and districts of Shaanxi Province and Gansu Province are as follows: Xi’an city, Baoji city, Xianyang city, Weinan city, Yangling District, and Dingxi city. The cities in the control group included Tongchuan city, Yan’an city, Yulin city, Ankang city, Jinchang city, Baiyin city, Weiwu city, Zhangye city, Pingliang city, Jiuquan city, Qingyang city, Longnan, and Linxia autonomous prefectures.

Additional information

Funding

The author would like to thank all the participants who spent their time on this work and the National Social Science Foundation of China [20BGL196].