China's Air Quality Controls feat. Li-An Zhou

In this China Conference event, Peking University's Li-An Zhou discusses how local Chinese officials respond strategically to minimum air quality control targets when they care more about pursuing regional economic development, which is closely linked to their career prospects. JHU's Matthew Kahn provided discussant remarks, and the event was moderated by IIEP Co-Director Jay Shambaugh, with an introduction from IIEP's Chao Wei.


As the world’s largest emitter of carbon dioxide, China has launched serious efforts to tighten its environmental regulation and curb air pollution in the past decade. A distinctive feature of Beijing’s approach is the critical role played by local governments in complying with central directives. China’s local officials are currently facing the dual tasks of pursuing local economic development and curbing air pollution, which are potentially conflicting with each other. To resolve this multitasking challenge, China has recently introduced minimum targets for air quality controls to discipline local officials while continuing to link their promotion prospects to local economic performance (such as GDP growth).


Using a novel prefecture-day-level dataset on air quality, Zhou finds strong evidence that air quality tends to improve when the air quality target is doomed to fail, but deteriorates significantly after the early fulfillment of the target is guaranteed. These “asymmetric” strategic responses are mainly driven by “outsiders” – local officials with no previous exposure to the regions to which they are assigned. Greater pressure to promote local economic development reinforces outsiders’ asymmetric responses. For “non-outsiders” who have been promoted from the local area and who are more likely to intrinsically value the local environment, air quality performance is stable in both cases of target fulfillment. The study sheds light on how minimum air quality targets have worked in China’s context and highlights the role of intrinsic motivations in mitigating strategic responses to minimum performance targets in a multitasking environment.


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