Regulatory Spillover Effects of Anti-corruption: Central Inspections and Local Environmental Enforcement

• In Event: Policy, Politics, and Media Student Research

Abstract

As a public policy instrument, anti-corruption is often expected to improve accountability and reduce implementation failures. A growing body of research shows that it can reshape bureaucratic behavior and governance outcomes. Yet much less is known about whether it also affects policy implementation beyond the anti-corruption domain itself. This question is especially important in settings where policy failure stems less from weak formal rules than from weak local enforcement. Against this backdrop, this paper examines whether anti-corruption generates regulatory spillovers in environmental governance in China. More specifically, it asks whether central anti-corruption inspections strengthen local environmental enforcement, through what mechanisms, and whether such changes translate into substantive environmental improvement.
To clarify the mechanism, we draw on classic deterrence theory. In Becker’s (1968) framework, actors weigh the benefits of noncompliance against the expected costs of punishment, which depend on the probability of detection and the severity of sanctions. Applied to this context, we model local governments as choosing environmental enforcement under a trade-off between the benefits of regulatory leniency and the expected costs of weak implementation. The probability of punishment may vary with inspection intensity, public reporting, and prior enforcement conditions, while the expected severity of punishment rises with stronger disciplinary pressure. Anti-corruption oversight therefore enters the model by increasing both the likelihood that lax enforcement is detected and the expected cost once detected.
China provides a particularly relevant setting for this study. Environmental governance depends heavily on local implementation, while local officials often face competing incentives between economic growth and regulatory compliance. The first round of central inspections following the 18th Party Congress intensified top-down anti-corruption oversight, making it a useful context for examining whether stronger monitoring and punishment reshape local environmental enforcement. This setting also aligns closely with the deterrence framework, because central inspections intensify scrutiny of local officials and thereby raise both the likelihood that weak enforcement is uncovered and the credibility of sanctions. Empirically, we construct a city-month panel for 2012 to 2015 using 17,183 environmental administrative penalty documents from China Judgments Online, aggregated to the city-month level. We then use an event-study design to trace changes in enforcement before and after inspections.
The results show that central inspections significantly strengthen local environmental enforcement, although the effect emerges only gradually. Around five months after inspection, environmental administrative penalties rise by about 10.8 percent. The effect is stronger in cities closer to provincial capitals, in places with greater public reporting, in jurisdictions with historically weaker enforcement, and in later inspection batches. Further analyses show that the response is concentrated at the county level, takes the form of stricter enforcement tools, especially fines and production restrictions, and is accompanied by significant reductions in major air pollutants, particularly PM2.5 and PM10.
This paper contributes in two ways. First, it advances research on public policy implementation by showing that anti-corruption can generate regulatory spillovers in non-targeted policy domains. Second, it extends  Becker’s deterrence framework to local government regulation by clarifying how top-down oversight shapes enforcement behavior within hierarchical governance systems.

Authors

• Mingzhe Wang, Tsinghua University
  Presenting Author

• Junming Zhu, Tsinghua University
  Non-Presenting Co-Author