Mandatory Targets and Environmental Performance: An Analysis Based on Regression Discontinuity Design

It is a critical question for environmental governance to examine whether the administrative award and punishment measures are effective in promoting environmental governance performance. Choosing the implementation of a mandatory target system (MTS) as the subject, this paper employs a fixed-effect panel data model and regression discontinuity design to test whether the MTS has improved the environmental governance performance of local governments in China. The results of this research demonstrate that the MTS has a positive effect on environmental performance, however the regression discontinuity design illustrates that the reward and punishment measures in the MTS have no significant effects on the provincial environmental performance. The results of this research provide a reasonable explanation to the existing gaps among the studies on the effectiveness of the MTS. This study has profound policy implications for the design and implementation of the environmental governance system in China.