The Paradox of Responsive Authoritarianism: How Civic Activism Spurs Environmental Penalties in China

Recognizing the need to better understand institutional change processes in authoritarian states, which play an increasingly prominent role in the world economy, we examine the efficacy of civic activism aimed at spurring governmental action concerning the environmental performance of firms in China. We highlight the paradox of “responsive authoritarianism” on display in China: to avoid needing to rule by coercion alone, the government seeks citizens’ feedback and tolerates pressures for change, but at the same time it resists the associated legitimacy threats regarding its capacity to rule. Local governments and the media play crucial and dual roles in this system: they mitigate change pressures from civic activism that takes place within the state’s systems, but they magnify change pressures from publicly visible civic activism occurring outside those systems. We test our conceptual model using a unique data set of environmental penalties imposed on Chinese publicly listed firms from 2007 to 2011. Our findings contribute to understanding processes of institutional change and outcomes of social movements. The online appendix is available at https://doi.org/10.1287/orsc.2018.1212 .