Crackdowns in Hierarchies: Evidence from China's Environmental Inspections
Abstract: We evaluate the effect of the central government's rotating crackdowns (2016-2017) on the environmental performance of cities and firms in response to China's air pollution crisis. During one-month crackdowns, concentrations of sulfur dioxide (SO2) at coal power plants in targeted cities fall on average by 25-27%, but increase once scrutiny ends. Pollution reverts earlier at state-owned plants accountable to the central government, compared to plants accountable to the local (city) government. Our findings suggest that crackdowns visibly demonstrated central government effort but did not result in lasting environmental improvement.
