Cleaning Up Its Act

Abstract

The urgent and global concern of environmental problems transcends local and regional boundaries, posing significant challenges for policymakers in developing countries. Amid conflicting economic and environmental goals, evaluating the efficacy of regulatory policies becomes increasingly critical. This study investigates the effectiveness of public policy in incentivizing developing nations to prioritize environmental regulation, with a specific focus on China’s most recent environmental policy, the Ecological Environmental Protection Plan. Using multilevel modeling and difference-in-differences estimation with data from six of China’s most populous cities between 2014 and 2019, we see evidence of air quality improvements following the implementation of the policy. Furthermore, we observe greater enhancements in air quality in the cities most affected by the institutional details of the policy. This shows that well-crafted public policy can improve air quality, providing crucial insights for policymakers and scholars alike.