Does the baby that cries get milk? Direct and indirect effects of public participation on environmental governance in China

We conducted a quasi-natural experiment using the gradual introduction of 12,369 hotlines across Chinese cities to evaluate the direct and indirect effects of public reporting on corporate environmental violations. Our findings can be summarized in three key points. First, public participation in environmental governance leads to a substantial reduction in pollution emissions from industrial firms, primarily targeting dirty industries rather than clean industries; furthermore, the indirect effect on clean enterprises does not offset the overall treatment effect. Second, responding to public reporting, regulators relax regulations on clean industries while tightening regulations on dirty industries. In turn, dirty industries implement measures to reduce emissions through process improvements, end-of-pipe treatments, and effective green innovations. Third, the effectiveness of public participation in environmental governance is influenced by local politicians’ professional motivations, telephone penetration, and citizens’ environmental awareness. Importantly, public participation improves residents’ health and well-being. Additionally, it has resulted in an annual GDP gain of 5.47 billion RMB and saved 15,369.1 million RMB in health care costs.