China's River Chief Policy and the Sustainable Development Goals: Prefecture-Level Evidence from the Yangtze River Economic Belt

ABSTRACT

The River Chief Policy (RCP), an institutional innovation in China by which top party and government officials assume responsibility for water management, shapes the incentive structure of local governments and may have a huge influence on the Sustainable Development Goals (SDGs). Using a staggered difference-in-difference approach and panel data from 91 cities in the Yangtze River Economic Belt, we estimate the impact of the RCP on an SDG index with eight local-specific indicators. The estimation results show that the RCP has improved the overall SDG index and significantly improved the levels of innovation, education, and consumption. Heterogeneity tests show that more affluent regions are more committed to investing in education, raising consumption, and increasing wages under the RCP. These results suggest that local governments in China have responded rationally and strategically to the RCP. In general, economic growth remains the central goal of local governments, while the strengthening of other responsibilities such as environmental protection will lead to more effort being made to achieve the SDGs during and after the COVID-19 pandemic.