Regularized Campaigns as a New Institution for Effective Governance

Abstract

This paper examines the synergy between institutions and campaigns in authoritarian regimes, focusing on how campaigns enhance institutional effectiveness.  While institutions aim to ensure consistent governance through established rules, they may falter when bureaucracies are compromised by special interests, leading to reduced compliance among regulated entities.  In such contexts, campaigns—defined as organized, state-led actions designed to enforce compliance through intensive, short-term measures—play a crucial role in improving information flow, reducing collusion, and diminishing the bargaining power of regulated entities.  This study introduces the concept of “regularized campaigns,” conducted in successive waves with varying intervals between them, maintaining enforcement impact even during periods of inactivity.  Using a unique firm-level dataset, incorporating several confidential government sources, we analyze how industrial firms in China responded to pollution regulations.  We find that firms with higher economic contributions committed more violations before the initiation of regularized campaigns but showed significant compliance improvements afterward.  These findings demonstrate that regularized campaigns not only counteract bureaucratic capture but also sustain their impact beyond active enforcement periods, offering a new institutional form that addresses the limitations of traditional institutions in authoritarian regimes.  This study contributes to the broader literature on governance, state enforcement, and firm-regulator interactions.

Keywords: governance, institution, campaign, regulation, environment, authoritarian regime, principal-agent, information flow

JEL Classification: Q53, Q58