Centralization of Environmental Administration and Air Pollution : Evidence from China

We study how centralized control over local bureaucratic agencies helps alleviate the enforcement problem of environment protection policies in China, exploiting a reform that empowers upper-level environmental protection bureaus to administrate lower-level bureaus vertically through personnel control. We find that the reform significantly improves air quality. The effect is stronger in prefectures where local information is more accessible to the provincial government or when local governments paid less attention to environmental protection before the reform. Additionally, we find that the reform significantly increases the intensity of inspection by local agencies and environmental investments by heavily polluting firms