Environmental regulation and the industrial sector in China: the role of informal relationships in policy implementation

Peter Hills and C. S. Man

Business Strategy and the Environment, 1998, vol. 7, issue 2, 53-70

Abstract: This paper focuses on the relationship between environmental regulators and industrial enterprises in China. There are widely recognized ‘implementation gaps’ in the Chinese environmental protection system. Previous studies have attributed such gaps to a combination of factors including legislative shortcomings, poorly designed policy instruments, an unsupportive work environment for environmental regulators, and a pro‐growth political and social environment. The present paper seeks to extend the analysis by examining the role of informal relationships between individuals and organizations, and their mediating influence on the implementation of environmental policy measures. We argue that such relationships, which reflect a cultural predisposition to harmony and consensus‐building among key actors, play an important role in determining how environmental policies are implemented, and how stringently regulations are enforced at the local level. Given the importance of decentralized implementation responsibilities in China, weaknesses in the system at the local level can constrain the achievement of national environmental policy objectives. A model of the implementation process is presented, and case studies from the industrial city of Foshan in Guangdong Province are used to illustrate the role played by personal and organizational relationships (guanxi) among environmental regulators and industrial polluters. © 1998 John Wiley & Sons, Ltd and ERP Environment.

Date: 1998
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