Financial transfer payment and green development transition in backward area: a case study in Jiangxi Province, China

Green development, as the second generation of sustainable development, is inclusive of ecological civilisation and common prosperity. China has recently initiated large-scale financial transfer payments to promote the green development transition of backward areas. However, the  policy effects are unclear. This study takes Jiangxi Province, the central backward and ecological function area, as an example to explore the dynamic transitions to green development in 80 counties (cities, districts) from 2001 to 2018 and evaluate the policy effects of transfer payment on green development transition based on a multi-period differential model and a panel regression model. Results show that (1) From 2001 to 2018, the green development index composed of economic development index, social security index, and environmental protection index showed an outstanding rising trend in Jiangxi Province, and the economic development index increased the most. (2) The transfer payment from central government to local government can significantly promote the green development transition. The longer the policy implementation time and the larger the transfer payment scale is, the higher the level of green development will be. (3) The per capita general budgetary fiscal revenue, urbanisation rate, proportion of added value of the service industry, and investment rate have positive effects on the green development index. This paper proposes that the Chinese central government may prolong the duration of transfer payment policy and expand the strength and scope of subsidies for key ecological function areas, while the local governments can develop eco-tourism based on ecological advantages and resource endowments. The horizontal ecological compensation mechanism should be improved and highlight the supervision and assessment for transfer payment funds.