Abstract
A common argument is that the comprehensive implementation of the river chief system (RCS) is a clear indication of the Chinese government's strong commitment to overcoming the problem of water pollution. Scant attention, nonetheless, has been afforded to systematically examining the economic and social effects of this pioneering policy. Based on news reports and data from regions in which the RCS was piloted, this paper fills in a critical literature gap by unpacking the environmental, economic, and societal benefits accrued from this river-based management approach. Specifically, by employing a difference-in-differences (DID) method, this study shows that (1) overall, the adoption of the RCS has significantly reduced the discharge of sewage per unit of GDP and improved water quality to a considerable extent; (2) the RCS, functioning under China's top-down bureaucratic structure, coupled with increasing encouragement of bottom-up oversight and citizen participation, has provided local governments with strong incentives to improve water quality in a timely manner in their respective jurisdictions through the introduction of a plethora of measures, ranging from increased investment in wastewater treatment to faithful enforcement of environmental regulations; (3) the positive changes anticipated as a result of the RCS cannot be materialized in regions that have difficulties sustaining economic growth or facilitating cross-boundary policy coordination; and (4) the long-term effectiveness of the RCS is based on its ability to compel local enterprises to innovate their modes of operation, ultimately leading to regional industrial upgrading. The paper concludes by discussing how these empirical findings can help policymakers devise feasible tactics for confronting the causes of China's current environmental predicament in the context of improving the alignment of individual officials' political aspirations with targeted environmental outcomes.