Can campaign-style enforcement facilitate water pollution control? Learning from China's Environmental Protection...

The effectiveness of campaign-style enforcement (CSE) on water pollution, especially the long-term effectiveness, is controversial, and little knowledge is known about the channels through which the effectiveness happens. We take advantage of China's Environmental Protection Interview (EPI)- a distinguished form of CSE launched in 2014, as a natural experiment to estimate the short-term and long-term effects of CSE on water pollution. Using a time-varying difference-in-differences model based on city panel data from 2006 to 2018, we find that EPI can lead to an average 14.5% reduction in water pollution, and this effect is still persistent in the long term. Mechanism analysis shows that EPI reduces water pollution mainly through the pressure effect on the government, the penalty effect on the firms, and the mobilization effect on the public. Heterogeneity analysis shows that the effect of EPI on water pollution is more significant in cities with high initial pollution, low public complaints, and low economic levels. Further cost-benefit analysis based on the estimated value of water pollution reduction shows that the upper health benefit of EPI is $520.97 billion, which is 4.87 times higher than its estimated cost of $107.05 billion.