NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Incentivizing China's Urban Mayors to Mitigate Pollution Externalities: The Role of the Central Government and Public Environmentalism

Siqi Zheng, Matthew E. Kahn, Weizeng Sun, Danglun Luo

NBER Working Paper No. 18872
Issued in March 2013
NBER Program(s):   EEE   PE   POL

China's extremely high levels of urban air, water and greenhouse gas emissions levels pose local and global environmental challenges. China's urban leaders have substantial influence and discretion over the evolution of economic activity that generates such externalities. This paper examines the political economy of urban leaders' incentives to tackle pollution issues. Based on a principal-agent framework, we present evidence consistent with the hypothesis that both the central government and the public are placing pressure on China's urban leaders to mitigate externalities. Such "pro-green" incentives suggest that many of China's cities could enjoy significant environmental progress in the near future.

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Document Object Identifier (DOI): 10.3386/w18872

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