State capacity and wildfire mitigation: Evidence from state-led forest conservation in China

摘要

This paper provides causal evidence on how state-led institutional reform in public forest management affects wildfire risk. We examine a reform in China that restructures state-owned forest farms as nonprofit public institutions, shifting their funding to government budgets and tightening enforcement of logging restrictions. Using a difference-in-differences design based on historical farm-town boundaries, we find that the reform lowers forest-fire incidence by roughly 10%. The effects peak during local political turnover and are stronger in areas upwind of local jurisdictions, suggesting that political incentives and accountability shape implementation. Fire declines are larger among farms located in counties with stronger fiscal capacity, which provide greater subsidies, and among farms with higher compliance with logging restrictions, highlighting public financing and regulatory enforcement as key channels. We also observe modest positive spillovers into adjacent woodlands. Accounting for spillover effects in nearby control areas implies a reduction of over 20% in forest fires within state forest farms. A simple cost-benefit analysis shows that health benefits are the main source of monetized gains and that benefits exceed costs under the spillover-adjusted estimate. Our findings illustrate how state capacity can be mobilized through public financing and regulatory authority to generate tangible environmental and social gains in publicly managed forests.