Political cycles’ impact on Chinese local governments’ environmental expenditures.

This paper examines local political cycles in China’s environmental expenditure at the prefectural level. The cycles are shaped by Provincial Communist Party Congresses—held every five years—before which most promotion decisions for prefectural party secretaries are made. Drawing on resume data on prefectural officials and socioeconomic data on 278 prefecture-level cities from 2007 to 2019, we find that fiscal spending on environmental protection rises during the first three years following each congress and then declines over the subsequent two years, constituting an inverted-U-shaped pattern over the five-year cycle. We argue that this pattern arises because local officials strategically prioritise environmental protection early in the cycle to maximise their promotion prospects. We corroborate this mechanism through difference-in-differences analyses using major environmental policy reforms as shocks and by documenting retirement-age discontinuities. In addition, we show that the inherent trade-off between economic development and environmental protection contributes to this cyclical allocation of fiscal resources.