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Does central supervision enhance local environmental enforcement? Quasi-experimental evidence from China

Bing Zhang (), Xiaolan Chen and Huanxiu Guo

Journal of Public Economics, 2018, vol. 164, issue C, 70-90

Abstract: This paper draws on a natural experiment generated by the National Specially Monitored Firms (NSMF) program in China to evaluate the effectiveness of central supervision at improving local environmental enforcement. We explore a unique firm-level Chinese Environmental Statistics dataset and utilize a regression discontinuity design to assess the impact of central supervision through the NSMF program on an industrial firm's chemical oxygen demand (COD) emissions. The results suggest that central supervision significantly reduces industrial COD emissions by at least 26.8%. These results highlight the substantial room for improvement in Chinese environmental regulations via central supervision. A more flexible environmental decentralization regime and comprehensive central supervision are thus recommended for future reforms.

Keywords: Environmental federalism; Central supervision; Water pollution; Regression discontinuity design; China (search for similar items in EconPapers)
JEL-codes: D22 Q28 Q58 O53 (search for similar items in EconPapers)
Date: 2018
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