Study on the Impact of Changes in Local Fiscal Expenditure on Environmental Pollution in China

Scientifically planning local fiscal expenditures to cope with the current severe ecological environment is an inevitable requirement for promoting ecological civilization construction and high-quality development. Based on the panel data of 30 provinces in China from 2007 to 2015, three different types of environmental pollution (industrial solid waste pollution, industrial wastewater pollution, industrial sulfur dioxide pollution) were selected as explanatory variables. According to whether the spatial correlation of pollutants was significant or not, spatial econometric models and common panel ones are used to estimate the impact of fiscal expenditure structure and scale changes on different types of environmental pollution. The results show that:firstly, industrial solid waste pollution and industrial wastewater pollution have a strong spatial positive correlation, showing local club characteristics; secondly, the impact of local fiscal expenditure changes on environmental pollution is heterogeneous. Optimizing local fiscal expenditure structure can reduce industrial wastewater pollution and industrial sulfur dioxide pollution, while the increase in local fiscal expenditures has significantly increased industrial solid waste pollution; finally, local fiscal expenditure changes have positive spatial spillover effects on environmental pollution in adjacent areas, indicating that local governments sacrifice environmental quality of the surrounding area in its development process.