The Choice of “Higher-ranking or Lower-ranking Students”: How Performance Feedback Impacts Local Governments' Policy Response Behavior

Whether central policies can be effectively implemented is closely related to the policy response behavior of local governments. Existing studies have explained the response of local governments to central policies from many different perspectives. However, the impact of performance feedback has been somewhat understudied. To fill the gap, this paper looks at China's environmental vertical management reform (EVMR) below the provincial level.

The paper identifies three types of performance feedback: absolute environmental performance feedback, positive and negative historical environmental performance feedback, and positive and negative social environmental performance feedback. On this basis, it explores the relationship among the different types of performance feedback and the policy response behavior of local governments in adopting the EVMR based on a monthly panel dataset of 286 cities from September 2016 to December 2020 and a Cox proportional hazards model and a zero-Inflated Poisson regression model.

The results show that after receiving poor absolute environmental performance feedback and positive or negative historical environmental performance feedback local governments are more likely to slow their speed of EVMR adoption. After receiving negative historical environmental performance feedback, local governments are more likely to respond to the EVMR with a high intensity. But neither positive or negative social environmental performance feedback has a significant impact on the speed and intensity of the local response. Analysis of the mechanism indicates that the effects of environmental performance feedback on the local response mainly occurs through a willingness to take risks and the environmental attention of the local governments. In addition, economic development positively moderates the relationship between absolute environmental performance feedback and the speed and intensity of the local response as well as the relationship between both positive and negative historical environmental performance feedback and the speed of the local response. However, economic development negatively moderates the relationship between absolute environmental performance feedback, positive historical environmental performance feedback, positive social environmental performance feedback, and the intensity of the local response, respectively. Last, public environmental attention positively moderates the relationship between absolute environmental performance feedback, negative historical environmental performance feedback, and the speed of the local response, respectively, as well as the relationship between positive historical environmental performance feedback and the intensity of the local response.

Overall, these findings advance our understanding of the mechanism through which performance feedback influences local government decision-making behavior and provide implications for instructing local governments to proactively respond to central policies.