Initiator or Intermediary? A Case Study on Network Relation of Environmental Regulatory Capture in China

Abstract

Behind the environmental regulatory capture (ERC) lies a complex network of interactions and interests. Identifying the roles of stakeholders in the ERC network and their behavioral motives can illuminate the mechanism of ERC incidents, and provide policy recommendations for reducing other types of regulatory capture. Drawing on the regulatory capture and principal-agent theories, this study develops a triple-layer principal-agent model of environmental regulation practices in China. We further conduct a social network analysis (SNA) on the ERC case in the Environmental Protection Bureau (EPB) of Bobai County, Guangxi Province, China to illustrate the hidden interactions and interest transmission structure among stakeholders in ERC. The results show that the ERC presents obvious characteristics of concealment and complexity, and individual capture often evolves into collective capture. Different stakeholders are in different positions and play different roles in the network. The environmental regulatory authority, the commissioned regulatory agency, and the agency of enterprises form the core power circle of the ERC network, in which the first two play the role of intermediary and the latter acts as an initiator. They together occupy the structural hole position and dominate the evolution of the ERC network. Peripheral structure stakeholders play the role of “bridge” and profit from the expanding ERC network. It is recommended that the principle of decentralization and the balance of power must be taken into consideration. Quantitative analysis methods such as SNA should be applied to clarify accountability when punishing responsible persons. More subjects are also encouraged to participate in environmental regulations and report illegal acts actively. Finally, a blacklist system should be established in the field of environmental protection for regulating the professional and social morality of all parties.