Perverse Incentive Structure and Policy Implementation Gap in China's Local Environmental Politics

Abstract The obvious paradox within China's environmental politics is the big gap between the central government's policy and its implementation outcomes at local levels. Despite concerns about implementation at the local level, much about the role of central governments in China's local environmental politics is still poorly understood. This article examines how the incentive structure set by the central authorities affects the policy implementation gap at the local level. Drawing on fieldwork and document analysis, this article argues that the incentives set by the central government regarding environmental policy implementation at local levels are perversely structured, meaning that the central government provides much more incentive for local governments' non-implementation or poor implementation of its environmental policies than it provides for full implementation. The central government's failure to encourage—politically, financially, as well as morally—local government officials to appropriately implement environmental policies can partly explain the production of the policy implementation gap at the local level. This implementation gap cannot be overcome by efforts at the local level unless the central government takes significant measures to address the perverse incentive structure embedded in the overall structure of China's local environmental politics. Keywords: Incentive structurepolicy implementation gaplocal environmental politics Acknowledgements This research is supported by the Haniel Foundation, US-China Institute of University of Southern California and the Fundamental Research Funds for the Central Universities, and the Research Funds of Renmin University of China (grant number: 11XNK009). An earlier version of this paper was presented at the 2012 Annual Conference of Association for Asian Studies (AAS) in Toronto, March 2012. I am very grateful for the thoughtful comments from Arthur Mol, Genia Kostka, Amir Hampel, Kyoung Shin, Nicholas Holtkamp and the two peer reviewers. Notes For a comprehensive literature review on Chinese environmental politics, see Wu (Citation2009). Here the policy implementation gap refers to the differences between the central level's environmental policies written in text and actual implementation outcomes produced at local levels. The 'policy implementation gap' is more or less fluid and depends on the interaction between the goals of policy-making and their implementation outcomes in practice: the bigger the differences between policy goals and actual outcomes, the bigger the implementation gap. Interviewee SHZ31 and Interviewee XM21 are two typical examples. As one of the first of four special economic zones in China, Xiamen is one of the deputy-provincial levels municipalities that have independent status in state economic planning, and also has provincial-levels autonomy and local legislative power in economic administration. PX is considered highly toxic and has been linked to birth defects in animals. Short-term exposure can cause eye, nose, or throat irritation in humans, according to the US Centers for Disease Control and Prevention. Chronic exposure can affect the central nervous system and may cause death. Benzene is a by-product of PX and is a toxic chemical that occurs naturally in the environment and is also used in a wide range of products. Exposure can result in a range of side effects, which can be acute or chronic, and even deadly. Long-term or high-levels exposure to benzene can result in a number of ailments. This chemical has been labelled a class 'A' carcinogenic by the US Environmental Protection Agency. For the representative international media's reports, see 'China city gets the (text) message', in Los Angels Times, print edition A-3. 1 June 2007; 'Mobilised by mobile', In Economist print edition, 21 June 2007; China bows to public over chemical plant: environmental protesters score landmark victory, Nature, 451 (117), 2008, published online 9 January 2008. XPCG is a special organization with the functions of administration, economy, and military in its jurisdiction. Since 1992, it has been a national-levels economic and technology development zone with the administrative power of a vice-municipality. No sewage and waste treatment plants were available until 2010 in YKETDZ. More discussion on China's cadre evaluation system, see Whiting (Citation2000) and Edin (Citation2003). 'Guanyu Yingkou Shi Ganbu Kaohe Zhibiao Tixi de Guiding' The Regulation of Yingkou City Cadre Performance Evaluation Indicators System, documents collected in the fieldwork, 2007. For more media coverage, see the on-line discussion on the website of People's Daily. Available at http: //opinion. people. com. cn/GB/40604/3648587. html (accessed 20 July 2012). For more details, see '2008 Zhongyang Caizheng Yusuan Baogao Caoan' Report of 2008 Central Budget Draft Plan. Available at http: //www. npc. gov. cn/huiyi/dbdh/11/2008-03/06/content₁406960. htm (accessed 6 March 2010). For more media coverage on this topic, see 'How to Spot a Fake Eco City? '. Available at http: //www. chinadialogue. cn/article/show/single/ch/4488-How-to-spot-a-fake-eco-city (accessed 27 September 2011).