What are the normative implications of political regulation waves? Based on quantitative counterfactual estimation and qualitative case description, this chapter assesses the hard tradeoffs imposed by political regulation waves – between social stability, employment, economic growth, and health and longevity among local populations. Local leaders face incentives to signal competence by promoting laxer environmental regulation to benefit jobs and the economy, imposing a measurable human cost due to dirtier air. Conversely, when local leaders seek to move up the political ladder by strengthening the implementation of regulations in pursuit of blue skies, air quality improves, but firms suffer profit losses, and many people lose their jobs and are forced to spend brutal winters without heating. One form of the political regulation wave is not inherently better than another. These are difficult tradeoffs.

This opening chapter raises the research questions that motivate this book. It briefly introduces the state of mineral exploration in China and the ensuing impacts on the Chinese economy and society and pinpoints the puzzling existence of a contained resource curse in China. After critically reviewing the existing debate on the resource curse, it proposes an original theory about how mineral resources affect state–capital–labor relations, which can explain the empirical observations in China. This chapter lays out the roadmap of the whole book and explains the research methods and data sources for the empirical analysis in the following chapters.

Policymakers in China have paid attention to SO2 emissions reduction since the 1990s, as adverse environmental effects such as acid rain devastated large parts of the country. Shen empirically tests the “political regulation wave” theory based on temporal patterns in SO2 regulation between 2001 and 2010. During this time, reduction targets were nonbinding during 2001-5 but binding during 2006-10. Since SO2 emissions management entails a low level of ambiguity, regulatory efforts translate well into regulatory effectiveness. Results based on official data from statistical yearbooks and on satellite-based statistics concur that top prefectural leaders whose prefectures received high reduction targets were incentivized to produce an incremental yet steady decrease in regulation during 2001-5 to accommodate economic and stability goals, consistent with theoretical predictions. Later, when binding SO2 reduction targets became tied to local leaders’ career prospects, they fostered a more consistent regulatory implementation during their tenures.

This chapter presents a new incentive-based theory to explain the systematic variation in regulatory stringency over time, which Shen calls the theory of “the political regulation wave.” It is intended to be a general theory with three scope conditions. First, in a decentralized political system, local leaders or politicians possess discretion over decision-making, resource allocation, and control over the bureaucracy. Second, local politicians or political leaders are incentivized to prioritize different policy goals throughout their tenure, per what their constituencies or political superio+L2rs prefer, to maximize their chances of reelection or promotion. Third, implementation of the policy is high conflict and low ambiguity in nature, so it takes on a political character. China’s air pollution control policies for sulfur dioxide (SO2) satisfy all scope conditions, while fine particulate matter (PM2.5) control satisfies the first two but entails some level of ambiguity. Nevertheless, the two empirical cases provide an interesting comparison. Shen derives three testable implications for SO2 and PM2.5 control in China.

This chapter explains how governance, especially local governance, happens in China. It expands upon China’s hierarchical political structure and its environmental governance system, highlighting the local environmental protection bureau (EPB)’s low rank and dilemma of having two principals—upper-level EPB and local government. Utilizing field interviews with key local actors and referencing public and internal policy documents, Shen lays out a broad range of factors considered when superiors make promotion decisions, such as competency, performance, and character factors. Crucially, Shen finds that local political leaders are expected to implement critical policies like economic growth steadily and incrementally during their tenure, with later years’ performance being more critical for promotion evaluation. The chapter concludes by exploring the pathways through which local leaders influence regulatory stringency to promote different priorities and targets, with promotions in mind.

In contrast to the benefits that capital enjoys, Chapter 3 shows in detail the largely negative impacts of mineral extraction on labor. Based on qualitative evidence on the working conditions and employment opportunties in mining industries, it reveals that resource boom in general does not benefit common citizens as the labor force. Moreover, mining industries generate various negative externalities to local communities, which impose heavy financial and health costs on local citizens. Statistical analysis corroborates the empirical observations and shows that resource abundance diminishes employment opportunities in not only high-tech but also labor-intensive industrial sectors and represses labor income in both urban and rural areas. The findings suggest that the resource sector can be characterized as pro-capital and anti-labor, which generates profound implications for social equality and stability.