Environmental Protection for Bureaucratic Promotion : Water Quality Performance Review of Provincial Governors in China

We show including quantitative environmental targets for bureaucratic promotion incentivizes government officials to enforce environmental regulation but at significant economic costs. Taking advantage of the gradual expansion of China’s water quality performance review (WQPR) over time and space, we find that WQPR significantly reduced ambient concentrations of criteria pollutants, digestive cancer mortality, and GDP growth rate. WQPR’s effects are more pronounced along provincial borders, which are targeted by WQPR, and when provincial governors have more promotion potential. An important mechanism is investment in wastewater treatment facilities. There is evidence that WQPR passed the benefit-cost test, especially in rural areas