Transboundary water pollution and promotion incentives in China

Abstract

This paper discusses the causes of water pollution at political borders in China from the perspective of promotion incentives. Officials are promoted based on the achievements of standards that are categorized into (1) the expected targets that should compete with other officials, such as economic performance, and (2) the binding goals that limit the minimum level of effort required, like pollution reduction. Using the dynamic panel and panel threshold model on cities along 18 major rivers in China, we analyzed how the government balances economic performance and pollution reduction targets and explained why the government neglects environmental regulation along political borders. We found relative economic performance is positively related to environmental enforcement effort. While the effect of economic performance on environmental regulation effort is non-linear. Relative economic performance is negatively related to the environmental enforcement effort when relative economic performance is lower than the threshold; for the other, relative economic performance is still positively connected to environmental regulation effort. The relative economic performance of downstream border cities is far below the panel threshold, and governments cannot obtain a competitive advantage regarding economic growth. The absence of promotion incentives results in the neglect of environmental supervision for governments at borders.