Accountability, Career Incentives, and Pollution: The Case Of Two Control Zones in China

27 Pages Posted: 15 Dec 2015 Last revised: 8 Jun 2016

See all articles by Yvonne Chen

Yvonne Chen

ShanghaiTech University - School of Entrepreneurship and Management

Pei Li

Xiamen University - Wang Yanan Institute for Studies in Economics (WISE)

Yi Lu

National University of Singapore (NUS)

Date Written: December 14, 2015

Abstract

We provide empirical evidence on the effectiveness of target-based performance evaluation for bureaucrats in the context of the Two Control Zones policy in China. In 2006, the Chinese central government made sulphur dixoide (SO2) emissions cuts a major performance evaluation criterion for prefectural city mayors and party secretaries. We compare emissions reductions in these so-called Two Control Zone cities, where more stringent emissions quotas were imposed, with reductions in non-control cities. Our results suggest that the new evaluation system is effective in achieving the target policy output. Adding the emission cuts into local bureaucrats’ performance evaluation significantly reduces the actual SO2 emissions. We further analyze the channels through which the policy operates and show that the new evaluation system changes bureaucrats’ behavior and induces them to exert more effort on controlling environmental pollution.

Keywords: Pollution, Government Accountability, Career Incentives, TCZ

JEL Classification: P16, Q25

Suggested Citation

Chen, Yvonne and Li, Pei and Lu, Yi, Accountability, Career Incentives, and Pollution: The Case Of Two Control Zones in China (December 14, 2015). Lee Kuan Yew School of Public Policy Research Paper No. 16-11. Available at SSRN: https://ssrn.com/abstract=2703239 or http://dx.doi.org/10.2139/ssrn.2703239

Yvonne Chen

ShanghaiTech University - School of Entrepreneurship and Management ( email )

100 Haike Rd
Pudong Xinqu, Shanghai
China

Pei Li (Contact Author)

Xiamen University - Wang Yanan Institute for Studies in Economics (WISE) ( email )

A 307, Economics Building
Xiamen, Fujian 10246
China

Yi Lu

National University of Singapore (NUS) ( email )

1E Kent Ridge Road
NUHS Tower Block Level 7
Singapore, 119228
Singapore

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