3.2 Construction of Treatment and Control Groups across Municipalities
Evaluating the causal impact of the nitrogen permitting freeze on public infrastructure delivery requires a difference-in-differences identification strategy that partitions administrative units by their underlying regulatory exposure. In this econometric framework, the sudden invalidation of regional permitting exemptions constitutes an exogenous policy shock, separating municipalities into differentially treated cohorts. Municipal jurisdictions proximate to protected conservation habitats face binding deposition constraints, whereas less vulnerable localities experience minimal direct disruption. As van Loosdrecht (2024) illustrates, scientific and technical knowledge surrounding nitrogen dynamics historically conditions how statutory thresholds translate into administrative constraints. Furthermore, the operationalization of institutional exposure must account for localized stakeholder dynamics and communication pathways, where gatekeeping mechanisms structure sectoral responses to the nitrogen impasse (Oosterbaan et al., 2025). To ensure identification validity, the empirical model contrasts project execution rates across high-deposition and low-deposition jurisdictions while estimating pre-treatment coefficients to confirm that baseline development trajectories remain statistically indistinguishable prior to the judicial intervention. Controlling for municipality-specific fixed effects and time-varying demographic covariates isolates the specific operational frictions generated by regulatory compliance, mitigating biases arising from unobserved local administrative capacity. Consequently, this methodological architecture allows for a robust isolation of project delays directly attributable to the regulatory freeze rather than confounding macroeconomic fluctuations.