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Does political incentive shape governments' disclosure of air pollution information?

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  • Liu, Chenhao
  • Kong, Dongmin

Abstract

This study investigates the distortion of government disclosure on air pollution and further explores underlying political incentives that drive such distortion. We introduce a newly developed method, that is, bunching estimation based on notch points, to identify the distortion in the air pollution index disclosed by local governments. Results show that the magnitudes of distortion are significant and vary across cities. We present evidence that local politicians' promotion incentives substantially drive the distortion of environmental information. Importantly, we find that high-frequency disclosure requirements effectively discipline the behaviors of local governments because of increased manipulation costs. Overall, we contribute to the literature by identifying the distortion of government information disclosure, investigating the underlying causes, and examining the validity of new disclosure policies in shaping government behaviors.

Suggested Citation

  • Liu, Chenhao & Kong, Dongmin, 2021. "Does political incentive shape governments' disclosure of air pollution information?," China Economic Review, Elsevier, vol. 69(C).
    • Handle: RePEc:eee:chieco:v:69:y:2021:i:c:s1043951x21000778
    DOI: 10.1016/j.chieco.2021.101659
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    More about this item

    Keywords

    Air pollution; Bunching estimator; Information disclosure; Regression discontinuity design; Political incentives;
    All these keywords.

    JEL classification:

    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations

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