Political career incentives and the environmental costs: Evidence from China’s promotion tournaments
Abstract
This paper shows that promotion incentives for county-level cadres in China are an important driver of air pollution deterioration. Building on the multi-winner tournament model proposed by Clark and Riis (1998), we predict an inverted-U-shaped relationship between the number of counties within a prefecture and the promotion incentives for county-level cadres. Using the length of small rivers as an instrumental variable for the number of counties within a prefecture, our empirical analysis identifies a robust inverted-U-shaped relationship between the number of counties and air pollution levels, suggesting that promotion incentives significantly exacerbate air pollution. Further analysis reveals that, in pursuit of economic growth, local cadres tend to relax environmental regulations and attract more pollution-intensive firms. In regions where cadres’ performance evaluation places less emphasis on economic growth, the inverted-U-shaped relationship does not exist. These findings suggest that local cadres’ career incentives stimulate economic growth at the expense of the environment.