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An incentives-based residential recycling programme was designed and implemented for improving residential waste sorting in Shanghai city, but showed very limited success in its performance. To identify why, this study systematically analysed each step of implementation using key informant interviews and site observations. Results show that policy intentions were retained in the policy devolution processes from Municipality to District, and then to Street (ward) levels, but the incentives concepts were effectively nullified in the further devolution to community-level governance. The local implementers focused on formal key performance indicators (KPIs) in order to satisfy inspections. However, the KPIs, which had been devised to allow ease of measurement, were found to unintentionally cause divergence from the policy intention of incentivisation of residents. Furthermore, high scores for these KPIs masked the implementation failure. This identification of the effective derailing of a policy via conscientious implementation is worth highlighting for avoidance in other programmes, in recycling or elsewhere.

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