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Decentralization, Collusion, and Coal Mine Deaths

Author

Listed:
  • Ruixue Jia

    (University of California San Diego, and CIFAR)

  • Huihua Nie

    (Renmin University of China)

Abstract

This paper investigates how collusion between regulators and firms affects workplace safety using the case of China’s coal mine deaths. We argue that decentralization makes collusion more likely and that its effect is strengthened if the transaction costs of collusion are lower. These hypotheses are tested by investigating the impact of decentralization contingent on regulators’ characteristics. Exploring both decentralization and centralization reforms in the coal mine industry, we find that decentralization is correlated with an increase in coal mine death rates. Moreover, this increase in mortality is larger for the regulators with lower transaction costs (proxied by the locality of origin).

Suggested Citation

  • Ruixue Jia & Huihua Nie, 2017. "Decentralization, Collusion, and Coal Mine Deaths," The Review of Economics and Statistics, MIT Press, vol. 99(1), pages 105-118, March.
    • Handle: RePEc:tpr:restat:v:99:y:2017:i:1:p:105-118
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