Does public participation promote environmental efficiency? Evidence from a quasi-natural experiment of environmental information disclosure in China

Previous literature on improving environmental efficiency largely focuses on the power of the government, ignoring the role of public participation represented by environmental non-governmental organizations (ENGOs). This paper draws on a quasi-natural experiment generated by the Institute of Public and Environmental Affairs (IPE) in China, which has been publishing the Pollution Information Transparency Index (PITI) since 2008, to evaluate the effectiveness of public participation. We utilize the panel dataset of China's 285 cities from 2003 to 2018 and employ the difference-in-differences (DID) method to investigate the causal impact of environmental information disclosure on environmental efficiency. The empirical results show that compared with non-PITI cities, environmental efficiency in PITI cities improves by 21.11% relative to the sample average. This promotion effect is obvious in the short-term, but disappears in the long-term. Furthermore, the paper proves that curbing pollutant emissions is the main mechanism for the improvements in environmental efficiency. Finally, we explore the heterogeneous treatment effect across different cities, and find that most of the effects come from eastern, developed, large and non-resource-based cities. The findings not only demonstrate the importance of public participation in green development, but also provide empirical evidence for a diversified environmental governance system.