Segmented Jurisdiction and Water Quality : Evidence From Major Lakes and Reservoirs in China

In China, large lakes and reservoirs usually span a few administrative areas therefore are co-managed by a multitude of government agencies at different levels. This generates a typical tragedy of the commons problem: water bodies with more administrative areas involved tend to be more polluted than those with less administrative areas. To see this, we build a simple economic model to illustrate that water quality deteriorates when the number of administrative areas increases. We proceed to empirically test this argument with a hand-collected water quality dataset that covers 267 major lakes and 710 reservoirs across China from 2010 to 2013. Our water quality measures are captured by two limited-value variables: the surface water quality (tier 1 to 6) and the trophic state (tier 1 to 5), where a large number indicates a higher pollution level. Using an ordered logit model and controlling for various economic, geographical and demographic features, we find that: when an additional county is involved in water management, the water quality are likely to deteriorates by one tier, heading towards a more polluted and more nutrient state. Our results suggest that simplifying the administrative hierarchy while add in a focal organization may help preserve clean water bodies