Environmental governance with Chinese characteristics: are environmental model cities a good example for other municipalities?

Model programs such as the 'environmental protection model city' have become an inherent part of China's urban environmental governance. The role of these incentive schemes for promoting best practice, however, has been neglected so far. In this study, we show that model city programs raise the bar in terms of environmental standards. What is more, model cities have a positive impact on regional economic development. We deploy a spatial Durbin model to measure best practice diffusion among 126 key environmental protection cities between 2009 and 2012. The results suggest that environmental model cities are better performers on average. We also find evidence for a positive spillover effect. Diffusion patterns are multi-layered where economic proximity is the most important dimension, followed by physical colocation and administrative hierarchy.