Evolutionary dynamics of horizontal ecological compensation in transboundary watersheds: institutional incentives and public participation

ABSTRACT

Horizontal ecological compensation (HEC) can coordinate cross-regional interests in water-resource allocation and pollution control, but strategic conflicts hinder its establishment. This study develops a tripartite evolutionary game of upstream governments, downstream governments, and the public, incorporating higher-level governments’ financial support and political rewards and punishments as exogenous incentives. Results show that stronger political incentives, greater public participation, and greater public environmental sensitivity encourage positive upstream environmental governance and proactive downstream action. When upstream governments have not fully adopted positive environmental governance, the direction of public participation depends on the net benefit of supervision and rights protection, whereas government strategies affect only its adjustment speed. Once positive upstream governance is fully adopted, evolutionary pressure on public participation disappears, leaving its probability neutrally stationary at the level reached. Environmental-damage compensation encourages proactive downstream action, whereas larger HEC payments strengthen upstream incentives but may increase downstream burdens. Numerical simulations illustrate mutually reinforcing strategic adjustments between upstream and downstream governments under the baseline parameters. Overall, the system combines reciprocal intergovernmental feedback with a distinct public-participation dynamic, highlighting the roles of political incentives, compensation design, and public supervision in HEC governance.