Turning a Blind Eye? On the Political Economy of Environmental Regulation in China

Associate Professor of Environmental Economics, Duke Kunshan University
Director of the Master of Environmental Policy Program, Duke Kunshan University
Director of the Environmental Research Center, Duke Kunshan University

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This talk provides evidence on the political economy of environmental data manipulation in China. We use a unique panel data set of 111 cities between 2001 and 2010. The data set includes reported daily air pollutant concentrations as well as demographic, education and experience characteristics of city party secretaries and mayors. We develop an innovative censored MLE strategy to estimate the proportion of manipulated blue-sky days for each city/year. Then we use the LASSO shrinkage technique to find potential predictors of city-level manipulation patterns among a large set of party secretary and mayor characteristics.  We find that city party secretaries with elite undergraduate degrees are associated with 2.38 additional manipulated blue-sky days in a year. Furthermore, among elite educated party secretaries, females and those with prior research experience are associated with lower levels of manipulation. The patterns in the data are consistent with economic growth and promotion concerns being a possible explanation for increased manipulation under elite educated party secretaries.