The Impact of Political Business Cycles on the Environment

Abstract This study investigates the environmental consequences of political business cycles in Vietnam’s one-party regime, which uniquely combines different elements of upward accountability to the Communist Party both at the stage of candidate selection at the National Congress and the National Assembly elections. Extending prior research on Environmental Political Business Cycles (EPBCs) that focuses predominantly on China, we leverage Vietnam’s distinct institutional context to examine whether and how political incentives linked to both the electoral cycle and intra-party review processes drive pollution cycles in authoritarian settings. Using satellite-based measurements of air pollution (PM2.5 and NO2) across electoral districts during three National Assembly election cycles, we find clear evidence of EPBCs, with pollution peaking during the mid-electoral calendar, coinciding with the candidate vetting process. Further, by integrating socio-demographic data on assembly members and firm-level panel data, we demonstrate that the intensity of EPBCs varies with the strength of local officials’ connections to central political leaders and business interests. These findings underscore the complex interplay between political incentives, institutional design, and environmental governance in Vietnam, offering new insights into the dynamics of EPBCs and broader authoritarian environmental governance challenges in Southeast Asia.