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

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.