Can inter-governmental coordination inhibit cross-border illegal water pollution? A test based on cross-border ecological compensation policy.

Cross-border illegal water pollution discharge (CIPD) occurs much frequently due to weak environmental supervision and unclear environmental rights. This paper attempts to explore the impact of cross-border ecological compensation policy (CBEC) on CIPD. By using day-night difference of pollution data at administrative boundary monitoring station, illegal water pollution discharge is calculated. Difference-in-differences-in-differences (DDD) model is used to estimate the impact of CBEC on CIPD. First, DDD results show that CBEC can effectively curb CIPD. Second, environmental regulatory effect, environmental governance effect and environmental awareness effect produced by CBEC are tested. CBEC inhibits CIPD by strengthening media supervision and public pollution reporting in environmental regulatory effect, and reduces CIPD by increasing environmental protection investment and environmental law enforcement efficiency in environmental governance effect, and curbs CIPD by promoting environmental information disclosure and reducing environmental corruption in environmental awareness effect. Third, by further analyzing different stages of CBEC, CIPD generated by environmental action coordination and environmental governance mechanism coordination is highly inhibited. Fourth, CBEC has a stronger inhibition effect on CIPD as upstream region is economically underdeveloped and downstream is economically developed. The conclusion provides policy implications from inter-government coordination for restraining CIPD.