The Inconvenient Truth of the Political Pollution Cycle: Theory and Evidence from Chinese Prefectures

Abstract

Scholars have documented extensively the economic effects induced by election and promotion cycles. Rather, this paper delves into the unintended environmental consequences of such political cycles, drawing evidence from local air pollution control in China between 2000 and 2010. This paper employs the classic principal-agent model, but refines it by taking into account the temporal aspect of local policy implementation. Using remote sensing technique to generate high-resolution satellite estimates for air pollution and economic measures, I argue that career-minded prefectural leaders in China boosted economic activities significantly in their third and fourth years, albeit it contributing inconveniently to annual pollution level. The strength of such cycle is determined by regional economic structure. Recent rather than average economic growth during a leader’s tenure is highly correlated with promotion outcomes, while the effect of air pollution control is negative yet largely insignificant. Strategic planning and bureaucratic capture explain this “political pollution cycle.”