Informed Enforcement: lessons from pollution monitoring in China
New paper titled "Informed Enforcement: lessons from pollution monitoring in China" by Zichen Deng and Sebastian Axbard will be forthcoming in American Economic Journal: Applied Economics.
Government regulations are often imperfectly enforced by public officials. In this study, we exploit the introduction of air pollution monitors in China to investigate if real-time monitoring of policy outcomes affects the enforcement of existing regulations. Using assignment criteria established by the central government and new geo-referenced data on local enforcement activities, we show that monitoring: 1) increases enforcement against local firms, 2) improves the targeting of enforcement, and 3) reduces aggregate pollution. These effects are driven by officials facing performance incentives and are stronger when there is limited scope for data manipulation, suggesting that real-time monitoring improves topdown accountability.