How Does Moderate Supervision Curb Elite Capture? Lessons from China’s Sustainable Water Governance

Elite capture, a power structure problem involving rent-seeking, hinders sustainable water resources management. Governments play crucial roles in instilling public legitimacy in water governance, a common-pool resource that benefits from cooperative solutions such as pilot competitions, co-monitoring, and inter-agency coordination. A study of South-to-North Water Diversion Projects in China showed how, when governments outsource small projects to local sub-contractors, a method named moderate supervision (ruo jiandu) can enable effective oversight, which is superior to a bidding model with strict supervision (qiang jiandu). The concept of moderate supervision was initiated in 2023, before which most small projects had been left in a risky state with no supervision (ling jiandu). Analysis of a case in Shandong Yellow River Water Diversion Irrigation Area involved semi-structured in-depth interviews. Findings revealed that an elite-government-villagers tripartite spiral was composed of 3 dimensions reshaping a positive elite culture: first, a whitelist of qualified local contractors; second, co-monitoring of multiple stakeholders with influence exerted by a three-tier mobilization system; third, inter-agency coordination innovatively enabling smooth functioning between policy entrepreneurs of formal institutions and local social governance of informal ones. Policy implications to underscore real-world applicability are provided.