Political cycles in Chinese urban water tariff adjustment

Cities worldwide struggle to price utility services efficiently under political constraints. This paper investigates how political cycles shape the timing of water tariff adjustments, using data from 252 Chinese cities over the period 2007–2019. We show that local officials systematically defer tariff adjustments during politically sensitive periods, particularly in the months before and during municipal political events. The magnitude of this effect varies across event types and across regions with different water resource endowments, with the probability of adjustment falling by as much as 83% relative to the baseline rate. These findings advance the literature on utility pricing by demonstrating that political constraints operate not only through price levels but also through the timing of adjustments—a dimension with direct implications for infrastructure investment and cost recovery. The results underscore the need for governance mechanisms that can better insulate routine pricing decisions from short-term political pressures.