Incentives and Outcomes: China’s Environmental Policy
AbstractIn generating fast economic growth, China is also generating growing concern about its environmental record. Using 2000-2009 data, we find that, while spending on environmental infrastructure has visible positive environmental impact, city spending is strongly tilted towards transportation infrastructure. Investment in transportation infrastructure correlates strongly with both real GDP growth, a measure of tangible economic growth relevant to city-level Party and government cadres’ promotion odds, and with land prices, which affect city governments’ revenues from land lease sales. In contrast, city governments’ spending on environmental improvements is at best uncorrelated with cadres’ promotion odds, and is uncorrelated with local GDP growth and land prices. These findings suggest that, were environmental quality explicitly linked to a cadre’s chance of promotion, or were environmental quality to affect land prices substantially, city-level public investment in environmental improvement would rise.
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Date of creation: Feb 2013
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Find related papers by JEL classification:
- G0 - Financial Economics - - General
- H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
- P2 - Economic Systems - - Socialist Systems and Transition Economies
- P26 - Economic Systems - - Socialist Systems and Transition Economies - - - Political Economy
- Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
- Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
This paper has been announced in the following NEP Reports:
- NEP-AGR-2013-02-08 (Agricultural Economics)
- NEP-ALL-2013-02-08 (All new papers)
- NEP-CNA-2013-02-08 (China)
- NEP-ENV-2013-02-08 (Environmental Economics)
- NEP-PBE-2013-02-08 (Public Economics)
- NEP-RES-2013-02-08 (Resource Economics)
- NEP-TRA-2013-02-08 (Transition Economics)
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