Vertical Regulatory Reform and Air Pollution: Evidence from China’s City-County Merger

Abstract

Air pollution control is an important link in the construction of ecological civilization, and government vertical regulatory reform is a key factor affecting air pollution control. This article takes China’s city-county merger as a typical policy for government vertical regulatory reform, and uses the staggered DID to estimate the impact of government vertical regulatory reform on air pollution. we find that China’s city-county merger could reduce air pollution, but this effect is mainly effective in the border areas of administrative regions and western regions. Further analysis shows that the reduced air pollution originating from the reformed areas can be attributed to reduced financial expenditure pressure and reduce the productive expenditure. The results in this study provide a reference for the government to adjust the power allocation at the city and county levels.