Target and Performance: Evidence from China's Air Quality Management

Taking China's air quality management during the 13th 5-Year Plan (2016-2020) as a case, this study empirically examines the impact of mandatory policy target set by the higher-level government on the performance of lower-level government in achieving the target. The results show that there is an inverted U-shaped relationship between environmental target value and target completion rate. In addition, the inverted U-shaped relationship is moderated by local economic growth rate. Specifically, economic growth impairs the positive effect of environmental target value on environmental performance before the turning point but alleviating the negative effect after the turning point. Moreover, higher-level attention can strengthen the target setting effect for local governments. Therefore, a successful target-based performance management system needs the reasonable design for the target difficulty and coordination of conflicting targets.