Decentralization, Collusion, and Coal Mine Deaths

Ruixue Jia · Huihua Nie

267 citations0/0 files storedThe Review of Economics and Statistics

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Regulation and Compliance Studies China's Socioeconomic Reforms and Governance Industrial and Mining Safety

Abstract

This paper investigates how collusion between regulators and firms affects workplace safety using the case of China’s coal mine deaths. We argue that decentralization makes collusion more likely and that its effect is strengthened if the transaction costs of collusion are lower. These hypotheses are tested by investigating the impact of decentralization contingent on regulators’ characteristics. Exploring both decentralization and centralization reforms in the coal mine industry, we find that decentralization is correlated with an increase in coal mine death rates. Moreover, this increase in mortality is larger for the regulators with lower transaction costs (proxied by the locality of origin).

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References

2006Politically Connected Firms 2005Selection on Observed and Unobserved Variables: Assessing the Effectiveness of Catholic Schools 2001Estimating the Value of Political Connections 2002Decentralization and corruption: evidence across countries 1986Hierarchies and Bureaucracies: On the Role of Collusion in Organizations 2005Regional decentralization and fiscal incentives: Federalism, Chinese style 2006Handcuffs for the Grabbing Hand? Media Capture and Government Accountability 2000The Razor's Edge: Distortions and Incremental Reform in the People's Republic of China

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