How Political Turbulence Changes Disincentives of Environmental Protection: Evidence from the Crime Crackdown in Chongqing

Abstract

Institutional disincentives often discourage major actors, such as politicians, corporate leaders, and the public, from taking practical steps to protect the environment in China. By using the crackdown on crime in the Chinese megacity of Chongqing as a case study, we argue that despite the strength of these disincentives, they are nevertheless highly susceptible to changes in the macro political environment, which can temporarily alter the regular preference order of these major political-economic actors and reduce industrial pollution. We employed the difference-in-differences approach and observed that the quality of surface water in Chongqing improved during the anticrime campaign because of reduced industrial wastewater discharge. However, after the campaign, the political atmosphere relaxed and the surface water quality declined. These findings suggest that reforming the institutions that shape the incentives of the major actors in environmental protection is critical to improving environmental protection in the long term.