Does fiscal decentralization promote green utilization of land resources? Evidence from Chinese local governments

This paper demonstrates the relationship between fiscal decentralization, political incentives for local government leaders, and the green utilization of land resources in a highly centralized political system. Based on data on fiscal decentralization, land resource use, and pollutant emissions from 2011 to 2018 in China, this paper finds that fiscal decentralization is an effective way to enhance the green utilization of land resources. However, when local government leaders are under intense promotion pressure, the beneficial effect is lost because they tend to prioritize short-term economic growth over environmental protection. In terms of policy implications, this study suggests devolving fiscal power while establishing lifetime accountability among local government leaders to reduce their short-termist behaviors and promote sustainable development.

Automated summary

This paper explores the relationship between fiscal decentralization, political incentives for local government leaders, and the green utilization of land resources. The findings indicate that fiscal decentralization is an effective way to enhance the green utilization of land resources. However, when local government leaders face intense promotion pressure, they prioritize short-term economic growth over environmental protection, resulting in the loss of the beneficial effect. Therefore, the study suggests devolving fiscal power while establishing lifetime accountability among local government leaders to reduce their short-termist behaviors and promote sustainable development.