Waste treatment is a problem faced by cities all over the world. In recent years, China, as a developing country, regards the municipal solid waste (MSW) classification as one of the important strategies to deal with the MSW problem. The previous MSW classification policies in China were all only advocacy in nature. It was not until January 2019 that the "Regulations on the Management of MSW in Shanghai" was officially promulgated as China's first compulsory MSW classification policy, marking the beginning of an era of compulsory MSW classification in China. How effective is the implementation of Shanghai's compulsory MSW classification policy 18 months after its implementation and can developing countries continuously and effectively implement compulsory MSW classification policies? These are important issues of concern to the government, academia, and the public. This paper establishes a three-stage DEA model to evaluate the implementation effect of the compulsory MSW classification policies in Shanghai during the period of February 2019 and July 2020. The study found that the average efficiency of the compulsory MSW classification policy in Shanghai reached 0.906 during the study period, indicating that the policy was executed reasonably well. However, there are only 5 months in 18 months that the policy was fully effective (reaching efficiency level 1), suggesting that there is still room for improvement. The main reason for not being able to achieve full effectiveness in some months is attributed to scale efficiency. At the same time, the general public budget revenue and expenditure of environmental variables have positive and negative impacts on the policy implementation effect in Shanghai. The research results can provide experience for China to comprehensively implement the compulsory MSW classification policy in the future and can also provide valuable case study information for cities in other developing countries to implement the compulsory MSW classification policy.