Can Ecological Governance Policies Promote High-Quality Economic Growth? Evidence from a Quasi-Natural Experiment in China

Abstract

The implementation plan of the National Ecological Civilization Pilot Zone (Jiangxi) is an experimental policy aimed at exploring the path of ecological value realization, optimizing industrial structure, and ultimately promoting the green economic development of cities in ecologically distressed areas based on good ecological protection and construction. Its policy objectives are as follows: (1) provide policy references for the development of other ecologically distressed areas in other Chinese territories, and (2) achieve a win–win situation for both ecological improvement and economic development and promote the harmonious development of humans and nature. This study considers China’s ecological governance pilot policy as a “quasi-natural experiment” based on a panel of 81 Chinese cities in Jiangxi Province, China, from 2014 to 2020. A DID model is constructed to study the impact of China’s ecological governance policies on the quality development of Chinese cities in four dimensions: economic development, economic structure, ecological environment, and the disposable income of residents. The following impacts are observed: (1) Ecological governance policies have insignificant effects on GDP promotion, and the above findings still hold after a series of robustness tests, such as the parallel trend test and PSM-DID and placebo tests. (2) Ecological governance policies can significantly improve the rationalization of the economic structure, promote the improvement of ecological environments, and increase the disposable income of residents in the pilot cities. (3) Due to the strong control of local governments over regional economies in China, the stronger the government intervention in the economy, the greater its effect on policy inhibition. (4) The economic structure of ecologically distressed regions is relatively homogeneous, and the primary industry makes up a high proportion of agricultural production. Since China abolished agricultural taxes in 2006, local governments are unable to obtain government tax revenues from agricultural production. The ecological management policy can not only protect land fertility but also reduce the over-exploitation of land resources. It can indirectly increase the scale of agricultural production per unit of land (i.e., the same land resources can create more output value), prompt the transfer of agricultural labor to secondary and tertiary industries, and promote the development of secondary and tertiary industries, which in turn improves the source of local government tax revenue. Moreover, the increase in government tax revenue can increase investment in ecological environments. This in turn increases the tax revenue of local governments, and the increase in government tax revenue can increase investments in ecological and environmental management; this eventually results in a green and high-quality development path with respect to the positive cycle of ecological protection and economic development. Therefore, the scale of agricultural production per unit of land and government tax revenue are important mediating variables for ecological environment improvements, and the mediating effect is obvious.