Policy objective bias and institutional quality improvement: Sustainable development of resource-based cities

Abstract

China has implemented many supportive policies to help the resource-based cities transit to sustainable development. However, these policies may induce unexpected results to institutional quality, which is an important factor to influence sustainable development. This paper examines how the policy affect the institutional quality of the resource-based cities, by building an institutional quality evaluation system which covering innovation environment, human resources, market environment and using Chinese “Sustainable Development Plan of Resource-based Cities (SDPRC)” as a quasi-experiment. The results show that the SDPRC has a significant negative effect on the overall level of institutional quality. Particularly, the policy implementation has significantly reduced the scores of institutional quality sub-items such as public service and human resources. Heterogenous analysis finds that the negative effect to institutional quality is significant in resource-depleted cities and coal cities. The policy implications of this paper are that government needs to emphasize the policy objective bias problem in the process of supporting resource-based cities and focus more on the institutional quality of resource-depleted cities and coal cities.