When the government cracks down on farmers burning fields, industrial pollution actually spikes because the inspectors are too busy to watch the factories.
SSRN · March 17, 2026 · 6297639
The Takeaway
This study reveals a hidden trade-off in multi-tasking agencies where enforcing one environmental rule 'crowds out' another. Because regulatory capacity is finite, the seasonal focus on preventing crop fires leads to a 30% drop in industrial penalties, effectively allowing factories to increase their emissions while nobody is watching.
From the abstract
Governments regulate multiple activities, but enforcement capacity is limited. This paper examines how demand in one regulatory domain crowds out enforcement in others. We use seasonal enforcement of agricultural open burning in China as an exogenous demand shock, leveraging county variation in crop maturity and planting patterns. Using administrative penalty records, we show that environmental inspectors reallocate attention away from industrial facilities during harvest windows, causing a 30%