Regularized Campaigns as a New Institution for Effective Governance
2025-07-03
How can governments sustain compliance improvements when institutions falter and ad hoc enforcement fades? This study introduces “regularized campaigns” as an institutional innovation that combines the high‐intensity enforcement of campaigns with the stability of institutions to mitigate principal‐agent problems. Compliance gaps often emerge when local regulators (agents) prioritize local economic or political interests over the directives of central or federal authorities (principals), resulting in greater violations by economically influential targets. Regularized campaigns address this by institutionalizing periodic enforcement waves, signaling sustained central government priority, reshaping local incentives, and reducing enforcement gaps. We examine this concept in the context of China's central environmental inspections (CEIs), which depart from traditional one‐off crackdowns by implementing structured, recurring enforcement waves. Leveraging a unique firm‐level dataset that integrates multiple confidential government sources, we show that before CEIs, firms with greater economic influence violated more environmental standards while facing fewer penalties. After CEIs became institutionalized, these compliance gaps narrowed significantly. Our findings suggest that regularized campaigns can realign incentives and reduce compliance gaps not only during active enforcement but also in periods between enforcement actions. The insights extend beyond China to decentralized authoritarian and democratic systems where persistent compliance gaps challenge effective policy implementation.