Equality in the water: How does water ecological civilization city policy enhance inclusive development in China?

This paper constructs an index system to measure the level of inclusive development in China's 283 cities during 2005–2021, and then empirically examines the spatial impact of water ecological civilization city policy, an environmental regulation policy, on inclusive development, based on the spatial difference-in-differences approach. This study offers some fresh insights with the following research findings. First, water ecological civilization city policy plays a positive role in stimulating inclusive development not only in pilot cities locally, but also in surrounding cities due to the spatial spillover effect. Moreover, the spatial spillover effects attenuate as the distance thresholds expand. Second, the heterogeneous impact of water ecological civilization city policy on inclusive development is confirmed, which is more effective in cities with lower population density, lower Engel coefficient, and that are resource-based. Third, water ecological civilization city policy directly promotes inclusive development by accelerating affluence, harmony, and sustainability, which are three pillars of inclusive development. Fourth, this paper also figures out two mediators between the nexus of water ecological civilization city policy and inclusive development, namely residential medical expenditure and human capital, which successfully advanced the current academic findings regarding the negative role of environmental pollution in people's living health and work conditions.