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Pollution Control Effort at China’s River Borders: When Does Free Riding Cease?

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  • Matthew E. Kahn
  • Pei Li
  • Daxuan Zhao

Abstract

At political boundaries, local leaders often have weak incentives to reduce polluting activity because the social costs are borne by downstream neighbors. This paper exploits a natural experiment set in China in which the central government changed the local political promotion criteria and hence incentivized local officials to reduce border pollution along specific criteria. Using a difference in difference approach, we document evidence of pollution progress with respect to targeted criteria at river boundaries. Other indicators of water quality, not targeted by the central government, do not improve after the regime shift. Using data on the economic geography of key industrial water polluters, we explore possible mechanisms.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 19620.

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Date of creation: Nov 2013
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Handle: RePEc:nbr:nberwo:19620

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Cited by:
  1. Millimet, Daniel L., 2013. "Environmental Federalism: A Survey of the Empirical Literature," IZA Discussion Papers 7831, Institute for the Study of Labor (IZA).

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