Regulatory oversight and information disclosure : information management under authoritarian environmentalism

Abstract

While democratic systems may struggle to implement environmental regulations when faced with resistance organized from the bottom up, authoritarian regimes possess a unique advantage of silencing opposition and mobilizing support from the top down. However, this same configuration of political power can give rise to a major disadvantage in the form of acute information deficiencies inherent in nondemocratic societies. Citizens and stakeholders wary of censorship and administrators trying to avoid blame collectively distort the information supplied to the government, which can lead to a crisis in state competence as government access to environmental data, performance metrics, and other information required for effective regulatory response is no longer unreliable. The extent authoritarian regimes can mitigate their information deficits will determine whether their efforts will rein in regulatory challenges or, as some critics of environmental authoritarianism believe, directly devolve into elite factionalism and political purges.

Guided by a conceptual overview of the informational challenges unique to authoritarianism, this project examines the viability and effectiveness of two policy tools when transplanted to authoritarian regimes. First, regulatory oversight in the form of top-down inspections helps the central authorities verify self-reported and internally transmitted information about enforcement and compliance levels on the ground, but it may interact perversely with factional fault lines, distorting the investigative scope and focus. I assess China’s central environmental inspections on regulatory compliance. The results show that the inspectors target city officials for poor regulatory outcomes, but those with weaker ties to the central leadership are also more likely to be inspected. My findings point to the use of environmental oversight to discipline regulators with stronger ties to central leaders over deceptive behavior.

Second, information disclosure offers a more indirect tool to address information undersupply by fixing the problem at source. Whether the targeted business or industrial entities respond positively to the call for greater disclosure may be determined by political affiliations rather than regulatory needs. I studied the environmental information disclosure of listed firms based in China from 2010 to 2021. The finding shows that politically connected firms disclose less in general, but their ability to obtain regulatory carve-outs disappears when scrutiny from the top intensifies, rendering the shift in disclosure patterns more pronounced for these firms in comparison with less connected ones.

This project introduces a new framework for conceptualizing environmental authoritarianism as an information problem and, through the analysis of central inspections and disclosure campaigns in China, draws empirical insights into how much political factors constrain these policy tools in the context of undemocratic rule. My answer is that politics matters, in that both cases indicate adverse impacts of factionalism on the patterns of oversight and disclosure, but not to the extent that the functional concerns about compliance and enforcement become completely crowded out as many may assume. This suggests that as informational inefficiencies loom in the pursuit of environmental regulation and governance in authoritarian regimes, future models of environmental authoritarianism should take into account the political motives of different actors in seeking and supplying information.