Does the market tell the truth? The role of third-party organizations in environmental data collection in China

Obtaining credible data is the basis for effective environmental governance. Each country has its own approach to monitor and collect key environmental data. In China, the central government has long relied on environmental data that is self-monitored and self-reported by local authorities, and which has been plagued with an issue of data manipulation. In order to improve the quality of environmental monitoring data, China implemented the reform of third-party environmental monitoring in 2015, which marks a historic leap in the reform of China’s environmental governance system. Despite the significance of third-party environmental monitoring that has been documented in governmental agencies, we know very little about its effectiveness in improving data accuracy and we have also yet to understand whether and how third-party engagements bring about changes to China’s environmental governance. Using a national database in China, this study empirically examines the following questions: Does third-party monitoring improve the credibility of environmental data in China? If so, how can this approach be used to remedy the problem of data manipulation in China? Our study finds that the accuracy of environmental data in China has been improved after the involvement of third-party environmental monitoring organizations. The mode of environmental governance in China, transforming itself from a mono-centric and non-participatory policy process, has shown the emerging trend of a mix of authoritarian control and market- based mechanism.