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Trade Competition and Domestic Pollution: A Panel Study, 1980–2003
Abstract
This research note examines whether trade competition abets regulatory races in the environmental area. To analyze trade competition, we develop a new measure, structural equivalence, which assesses competitive threats that a country faces from other countries whose firms export the same products to the same destination countries. Employing this new measure, we analyze air pollution intensity (sulfur dioxide or SO2) and water pollution intensity (biochemical oxygen demand or BOD) for a panel of 140 countries for the time period 1980 2003. We find that trade competition is a significant predictor of water pollution intensity among structurally equivalent countries. We then test separately whether trade competition abets upward and downward regulatory races. We find that in the case of water pollution, countries respond symmetrically to downward and upward races, that is, they follow their structurally equivalent competitor countries both when they ratchet down their regulations and when they ratchet up regulations. In the case of air pollution, however, countries are responsive to downward policy changes only in competitor countries.
... The core task of the empirical work is to verify the existence of the bandwagon strategy in local governments' EID, and the bandwagon strategy is essentially a particular type of intergovernmental strategic interaction. This study thus adopts the spatial econometric approach, which is widely used in the literature to test intergovernmental strategic interactions (Cao and Prakash 2010;Chen and Jia 2022;Konisky 2007), to generate empirical evidence. Specifically, both the basic first-order spatial econometric model with only one spatial lag and its high-order variant with multiple spatial lags (Yu, Zhou, and Zhu 2016) are applied. ...
... Such an organisational process of performance feedback has been widely identified in the existing literature (Meier, Favero, and Zhu 2015). Second, lagging the spatial lagged term fends off the simultaneity bias 6 and thus allows us to perform the estimations with simple ordinary least squares regressions (Cao and Prakash 2010;Konisky 2007;Shi and Xi 2018). ...
... There are two patterns of competition: race to the top and race to the bottom. AEM is a method commonly used to discriminate the two competition patterns (Cao and Prakash 2010;Konisky 2007). Specifically, if the cities are racing to the top in EID, we should observe that a city responds to its peers in a situation where it finds its PITI score lower than that of its peers, but not in a situation where its PITI score is higher. ...
... First, by focusing on international environmental commitment levels, our research adds to the numerous studies on international environmental cooperation (Bernauer et al. 2010, Cao andWard 2017). Second, we contribute to the growing field of research concentrating on environmental politics in developing countries focusing on how trade and environmental commitment interact (Cao and Prakash 2010, Spilker 2012, Prakash and Potoski 2017, Brandi et al. 2019. Third and finally, our study speaks to those scholars of environmental politics analyzing voluntary environmental commitments (Khanna 2001, Prakash andPotoski 2006). ...
... Due to its focus on environmental commitment and performance in the global South, our paper serves as a bridge between several strands of the literature that have been rather unrelated. In particular, we combine the literature on non-trade clauses in PTAs (Lechner 2016, Bastiaens andPostnikov 2017) with the growing field of research concentrating on environmental politics in developing countries (Cao and Prakash 2010, Spilker 2012 Potoski 2017) as well as with scholars of environmental politics analyzing voluntary environmental commitments (Khanna 2001, Prakash andPotoski 2006). An implication of our findings is to provide some positive news for policymakers since they suggest that even without the North imposing environmental clauses on developing countries, the latter often intrinsically commit to environmental protection in their trade agreements. ...
Conventional wisdom suggests that preferential trade agreements (PTAs) contain environmental standards because the highly regulated North imposes these standards on the reluctant South. But what about the increasing occurrence of environmental standards in South-South trade agreements? Are they simply a product of a diffusion process from North-South PTAs? Or do environmental standards in South-South PTAs signal real commitment to both environmental regulation and performance? We test these two perspectives against each other by quantitatively examining original data on environmental provisions in 479 PTAs. Using performance-based indicators our results support the notion that if developing countries take on the obligation of committing to environmental. When relying on a measure on commitment levels in the Paris Agreement on Climate Change, the results rather point to the diffusion-based perspective. In contrast to the conventional wisdom, the study shows that environmental protection is not always extrinsically motivated by developed countries.
... Conversely, less-developed countries will adopt laxer environmental standards in order to attract multinational corporations and export pollution-intensive goods (Esty & Geradin, 1998 While various studies seek to provide empirical evidence on the nature and impact of these linkages, there is actually rather little evidence that countries lower their environmental standards in order to remain competitive (Grey & Brack, 2002;Wheeler, 2001). Recent exceptions are Cao and Prakash (2010) and Andonova, Mansfield, & Milner (2007). In particular, Cao and Prakash (2010) show that trade competition between countries that export similar products to the same countries results in both countries having higher air pollution, as measured by SO2 emissions. ...
... Recent exceptions are Cao and Prakash (2010) and Andonova, Mansfield, & Milner (2007). In particular, Cao and Prakash (2010) show that trade competition between countries that export similar products to the same countries results in both countries having higher air pollution, as measured by SO2 emissions. Similarly, Andonova and colleagues (2007) report that increasing trade openness in post-Communist countries is connected with laxer environmental regulation. ...
How does liberalization of trade and investment (i.e., economic globalization) as well as membership in international organizations (i.e., political globalization) affect the natural environment? Does economic and/or political globalization lead to ecological improvement or deterioration? This article reviews the existing literature on international political economy (IPE) and the environment in view of these and related questions.
While globalization has various dimensions—economic, social, and political—IPE focuses mainly on the economic dimension when analyzing the effect of globalization on the environment. In particular, IPE puts most emphasis on the environmental implications of trade in goods and services as well as foreign direct investment (FDI). Even though both trade and investment are thought to have a substantial impact on the natural environment, the existing literature demonstrates that the effects of economic globalization on the environment are neither theoretically nor empirically one-dimensional. This means that existing research does not allow for a clear-cut overall assessment in terms of whether globalization leads to an improvement or deterioration of the environment. This is the case because the impact of economic globalization on the environment materializes via different mechanisms, some of which are supposedly good for the environment, and some of which are bad.
On the one hand, economic globalization may improve environmental quality via its positive effect on economic growth, since trade and FDI facilitate specialization among countries according to their comparative advantage and the transfer of resources across countries. On the other hand, relevant economic theory gives little reason to believe that free trade and FDI will influence all countries in the same way. Instead, when considering the relationship between economic globalization and the environment, it is important to consider the interactions between scale, composition, and technique effects created by different national characteristics and trade and investment opportunities. In particular, the scale effect of openness to trade and capital mobility increases environmental degradation through more intensive production. The technique effect predicts a positive effect of trade and FDI on the environment through the use of cleaner techniques of production. And the change in the sectoral composition of a country as a consequence of trade and FDI, the composition effect, could positively or negatively affect the environment of a country (e.g., a change from agriculture to industry may lead to higher energy consumption and air pollution while a change from industry or agriculture to service is expected to decrease environmental degradation). Consequently, the overall effect of trade and FDI on environmental quality can be positive, negative, or nonexistent strongly depending on the specific situation of the country under investigation.
Furthermore, both theory and empirical research highlight the potential for government policy and environmental regulations to affect the relationship between trade/FDI and the environment. On the one hand, increased competition between economic actors (usually companies) due to increased market openness (globalization) might cause a race to the bottom or at least regulatory chill in formal and informal environmental standards as well as pollution havens attracting foreign direct investment. The reason is that countries might weaken (or at least not increase) their environmental policies in order to protect industries from international competition or attract foreign firms and FDI motivated by the expectation of lower costs of environmental protection. Hence the (theoretical) expectation here is that developed countries will refrain from adopting more stringent environmental regulations and might even reduce existing standards due to competition with countries that have laxer environmental regulation. And less-developed countries will adopt lax environmental standards to attract FDI flowing into pollution-intensive sectors and export the respective goods to jurisdictions with higher environmental standards.
In contrast, the Porter hypothesis states that a tightening of environmental regulations may stimulate technological innovation and thus help improve economic competitiveness. In addition, trade openness may induce an international ratcheting up of environmental standards (trading up) as higher environmental standards of richer and greener countries spread—via trade and investment relationships—to countries starting out with lower environmental standards. Furthermore, multinational corporations engaging in FDI and applying universal environmental standards throughout their operations tend to transfer greener technology and management practices to host countries, thus promoting the upgrade of local environmental standards and improving the environmental quality in those countries (the so-called pollution halo effect).
Echoing the many theoretical pathways through which globalization can affect the natural environment, empirical studies estimating the impact of trade and FDI on environmental standards and environmental quality deliver quite heterogeneous results. In particular, the literature points to various factors mediating the effect of trade and FDI on the environment, such as differences in technology between industrial and developing countries, stringency of environmental regulations, property rights and political institutions, corruption levels as well as the pollution intensity of multinationals.
More recently, IPE scholars have started to study the political dimensions of globalization and how they are related to environmental protection efforts. Memberships in international organizations are at the center of this research and recent studies analyze, for example, how they may affect the quality of the environment. Other studies focus more on specific organizations, such as the World Trade Organization, and, for instance, evaluate whether in trade disputes over environmental standards economic or environmental concerns prevail. Finally, a new strand of the IPE and environment literature deals with the micro level and studies how citizens evaluate economic openness in light of potential environmental concerns.
... 72. As in Cao andPrakash 2010. To illustrate the face validity of the measure, I plot the average export competition weights (before multiplying by Model Law enactment) for South Korea and Thailand (Figure 7). ...
What happens to a public, domestic institution when its authority is delegated to a privately run, transnational institution? I argue that outsourcing traditionally national legal responsibilities to transnational bodies can lead to the stagnation of domestic institutional capacity. I examine this through a study of international commercial arbitration (ICA), a widely used system of cross-border commercial dispute resolution. I argue that ICA provides commercial actors an “exit option” from weak public institutions, reducing pressure on the state to invest in capacity-enhancing reform. I find that the enactment of strong protections for ICA leads to the gradual erosion of the capacity of domestic legal institutions, particularly in countries with already weak legal systems. I test the mechanism driving this dynamic using dispute data from the International Chamber of Commerce. I find that pro-arbitration laws increase the use of international arbitration by national firms, suggesting that firms use ICA as an escape from domestic institutions. This article contributes to debates on globalization and development as well as work on the second-order effects of global governance institutions.
... Studies have shown that countries adopt environmental policies to increase imports and exports of goods. Cao and Prakash (2010) find that countries ratchet up or down their environmental laws if their trade competitors have done so. Saikawa (2013) finds that high-income and upper-middle-income countries can yield higher exports if both exporter and the importer have the same automobile emission standards than when only the exporter has them, showing that it is beneficial for trading partners to have similar emissions standards. ...
There are 45 countries which have adopted a kind of carbon pricing policy – either a carbon tax or entered a cap–and–trade or both – while other countries do not have such policies implemented. As carbon pricing policies are considered as an effective lever to mitigate climate change, there is a need to understand what factors are motivating countries to adopt a carbon pricing policies and what factors might limit such endeavor. There is thus a need to examine how carbon pricing policies get adopted cross–nationally to examine pathways for climate change mitigation and incentivize other countries to follow. In this study, a model combining both internal and external diffusion factors is built (how one countries adoption of a carbon pricing policy affects another) to identify factors of adoption of carbon pricing policies. An Event History Analysis approach was used by compiling data for 127 countries running from 1990 to 2019. The findings show that the carbon pricing policies diffuse mainly through learning from neighboring countries and to a slight degree, by imitation. With a split sample analysis to account for policy heterogeneity, it was seen that both the carbon tax and the cap–and–trade system diffuse through the learning mechanism, however for the cap–and–trade, the policy can also diffuse through coercion and normative pressure if countries are part of EU. It was also found from the regressions that adoption of the carbon pricing policy by a country is motivated by a democratic political regime and from the level of coal production in the country. Among other groups, this finding is important for the international climate advocacy groups to decide which countries are more likely to adopt such policies where they can push forward this agenda.
... To adequately determine whether there is a race to the top in judicial independence, we perform further tests following the approaches in current literature (Cao and Prakash 2010). We split the competitors' policies into two groups. ...
In this article, building on the globalized competition-driven policy convergence literature, we argue that states improve judicial independence when their competitors for foreign direct investment (FDI) have granted more autonomy to their own courts. We also argue that this effect is stronger in more democratic regimes. We finally argue that non-high-income nations are more likely to react positively to their competitors’ improvements in judicial independence. Using FDI data from 1993 to 2010 and the structural equivalence technique while addressing the endogeneity issue in the relationship between judicial independence and investment, we capture the policy choices of FDI competitors concerning judicial independence. We find evidence in support of our theoretical conjectures. Our results remain largely robust to alternative model specifications, measures, and estimators.
... The rationale behind this specification is twofold: First, in addition to the contemporaneous influence of peers' choices, the focal government's ECER policy prioritization could be affected by the behaviors of its reference group in the previous period. Second, this specification mitigates the simultaneity bias of spatial lagged models because y j, tÀ1 is closely related to y j, t but not directly correlated with e i, t (Cao and Prakash 2010;Shi and Xi 2018). Ordinary least squares regression is applied in this specification. ...
Gaming, one of the most noticeable “diseases” plaguing performance management, has attracted abundant scholarly attention. Adopting the perspective of methodological individualism, the extant literature, however, has neglected the horizontal strategic interactions among local governments. This study develops a formal game-theoretic model to investigate the bandwagon strategy, a particular type of horizontal gaming strategy, in the context of China’s Energy Conservation and Emission Reduction (ECER) policy and applies spatial econometric methods to empirically confirm the existence of such a bandwagon strategy. Our findings suggest that horizontal gaming strategies should be taken seriously to improve the efficacy of performance management.
... An increase in competition for foreign investment, however, can have a negative impact on mental health. Governments attempt to attract foreign investment by deliberately depressing wages and imposing the lowest labor and pollution standards (Cao and Prakash 2010;Olney 2013). Notably, inferior working conditions (Fiori et al. 2016;Lager and Bremberg 2009) and severe environmental problems, such as pollution and noise (Klompmaker et al. 2019;Wang and Yang 2016), are associated with an increased risk of poor mental health. ...
Objectives
Given the speculation of the market economy causing an epidemic of depression, this study aimed to examine the influence of international trade on the prevalence of depressive disorders.Methods
We used panel data from 1993 to 2015 covering 170 countries (n = 3787) and applied fixed effects regression models. We modeled the prevalence of depressive disorders as a function of international trade, adjusting for economic development, economic growth, and population size. Regime types, media freedom, and capital–labor ratio were included as moderators.ResultsA 100% point increase in the value of international trade indicated a 0.09% point decrease in the prevalence of depressive disorders (− 0.09, confidence interval [CI] − 0.01 to − 0.18). However, this effect existed only for democratic countries (− 0.15, CI − 0.03 to − 0.28). The effect was more prevalent when the governments allowed the media more freedom (score of 100, − 0.31, CI − 0.17 to − 0.45) or when a country’s capital–labor ratio of endowments was high (50,000, − 0.22, CI − 0.08 to − 0.35).Conclusions
Trade brings about positive mental health outcomes in democracies, countries having free media, or capital-abundant economies.
... Transboundary pollution is found to result in meteorological, ecological and health damages Zhang et al., 2017;Ngo et al., 2018). To overcome transboundary externalities, international institutions are necessary to create disincentives for pollutive externalities (Sprinz, 1994;Mitchell, 1994;Cao, 2010), as net pollution exporters were substantially less likely to ratify than net receivers, suggesting the presence of strong free-riding incentives (Perrin, 2010). ...
Ambient air pollution kills over four million people every year globally. Improving air quality presents a complex problem for governments as emissions are produced from a wide range of sources and tend to cross boundaries. To understand the challenge of transboundary air pollution transfer, we use a detailed emissions inventory and a source-oriented chemical transport model to explore state-to-state flows of emissions within the world's largest democracy, India, where poor air quality has caused a public health crisis. On average, 46% of population-weighted air pollution exposure originates from another state. Of the major sources, energy (75%) and industry (53%) see most of their emissions travel to another state. All sectors have 39% or more of their emissions travel across state boundaries. India's current policy framework is not equipped to deal with these problems, as it does not centralize the formulation and enforcement of relevant policies sufficiently. To solve the problem of air pollution, India needs a more centralized form of environmental federalism.
... Further, these negative policy externalities should matter mostly among economic competitors because competitors have similar economic profiles which effectively channel these externalities into direct adverse impacts. Research has demonstrated that the economic competitiveness of a state is largely immune to deregulation by its noncompeting peers (Cao 2010;Cao and Prakash 2010). Hence, states will face higher pressure to follow suit when their economic competitors pursue deregulation in labor institutions by scaling back labor rights protection (Wang 2017). ...
States can seemingly defy the dictates of globalization. In practice, although being pressured by their competitors, states rarely engage in the race to the bottom by downgrading labor rights laws that are politically costly to pursue. I argue that states’ resistance is made possible by adopting more viable policy alternatives, i.e., concluding preferential trade agreements (PTAs). PTAs can generate considerable economic gains in a less politically costly way than does reducing legal labor protection. As a result, it is expected that a pair of states is more likely to form a PTA in the face of policy pressure to lower legal labor protection. I also argue that facing such pressure, these states are more likely to include strong labor provisions in PTAs. Finally, in the face of the policy pressure, states may feel that signing a PTA is a bit less urgent when they are able to diminish practical labor protection. Applying structural equivalence technique to a new global labor rights dataset to capture the policy pressure to lower legal labor protection, I find robust evidence in support of these conjectures.
... Environmentalists can promote CE if they find key trading stakeholders of a country by improving environmental laws and practices in these countries as they identify crucial points and treat them through political and economic pressure to bring changes in the law. Trade happens among several countries and only focusing on an individual country would not benefit much, instead targeting a group of countries together would prove better in dealing with the environmental issues (Cao & Prakash, 2010). ...
This book examines the Indian mandate for Corporate Social Responsibility (CSR) and its implementations in various individual organizations. Although the mandate is applicable only to certain large and stable companies, many believe that India is poised to become the birthplace of social, economic and environmental transformation, given the immense size of the Indian population and its challenging socio-economic index. The book explores the various facets of CSR investigation and places special emphasis on the Schedule VII of the Indian Companies Act of 2013, which defines specific areas of intervention for these companies. In addition, it provides a wealth of first-hand case studies that exemplify the ongoing developments and the fundamental challenges and opportunities of mandated CSR.
... By looking at only one aspect-quantity or quality-research is not accurately encompassing the full effect that a reduction of potable water can have on the political will of the people. Previous studies have mainly focused on the issues of water quality, and the overall impact of pollutants on water resources (Cao and Prakash, 2010;Jorgenson, 2007). By focusing on issues of pollution impacts alone, they miss other important impacts, i.e. poorer citizens who are denied access to water even when it is clean, and their connection to wider government policy. ...
Does foreign direct investment (FDI) decrease access to clean water in developing nations? Governments use economic growth from globalization to fund investment in infrastructure to improve water access, but FDI is hindering these efforts through pollution and increased water usage that put pressure on the supply of this public good. I test the hypothesis that growing pressure from increased use and pollution of water by foreign investors reduces water access in developing countries, where impacts are felt more acutely than in developed countries where public goods institutions are stronger. Using a country-year fixed effects regression model on a panel data set of over 130 countries from 1990 to 2010, I assess whether FDI increases or decreases potable water access in developing countries, and the role that development plays in moderating this effect. I find strong evidence of a negative relationship between FDI and access to potable water in developing countries.
... Compared with cross-sectional or time-series data, the panel econometric model has significant advantages in capturing the complexity of causal relationships (Hsiao, 2007). Meanwhile, the spatial model has been widely used in policy convergence studies (Cao & Prakash, 2010;Hays, Kachi, & Franzese, 2010;Simmons & Elkins, 2004). Using panel data with spatial features, the SPA can be utilized to make the data fit with the model. ...
en The link between geographical leadership mobility and policy isomorphism is rarely discussed in the extant literature. We argue that the geographical leadership mobility encourages local executives to converge their development experiences in their original working jurisdictions and their current positions. The distinct Chinese political personnel system provides an ideal environment that allows researchers to examine the isomorphic effects of geographical leadership mobility. This research builds a dataset of local social spending between 1998 and 2011 as well as a database of the leadership mobility history of provincial executives in China. Results of the spatial panel analysis (SPA) demonstrate that the geographical leadership mobility (i.e., horizontal, top‐down, and bottom‐up) of governors stimulates the regional isomorphism of provincial education and health care spending. The empirical findings affirm the effectiveness of the effort of the Chinese central government in narrowing the regional inequality of social welfare provision through the geographical mobility of local leadership.
Abstract
zh 现存文献很少讨论到领导层的地域间流动与政策同构之间的联系。我们认为，领导层的地域间流动可以鼓励地方行政长官将他们在原来工作地区的发展经验融合到当前的职位中去。中国的政治人事制度具有其独特性，它为研究者探索领导层的地域间流动所带来的同构效应提供了一个理想环境。这项研究建立了1998年至2011年间的数据集，它包含了地方社会支出数据以及中国省级行政长官理人员的流动历史数据。空间面板分析（SPA）的结果表明，省长的地域间流动性（即横向，自上而下和自下而上）刺激了省级教育和医疗卫生支出的区域同构。实证结果证明了中国中央政府通过地方领导层的地域间流动来缩小地区之间社会福利供给不平等这一举措的有效性。
... The recent development in the policy network literature has opened the opportunities for testing policydiffusion theory with social-network analysis (Lubell et al. 2012), but little theoretical and empirical work has been done to formulate the pathways that networks channel diffusion, except for a small stream of literature on international trade and relations. These studies focused on the diffusion of public-sector downsizing across 26 countries of Organizations for Economic Cooperation and Development (Lee and Strang 2006), policy changes in capital taxation across nations (Cao 2010), the diffusion of pollution intensity across 140 countries (Cao and Prakash 2010), and the spread of domestic regime change (Zhukov and Stewart 2012). But, none of these comparative politics studies have captured the role of public managers and their networks in the diffusion of innovations. ...
... Because the ill effects of air pollution are highly visible, there is often strong political pressure to address the problem. Environmental policies targeting motor vehicles are politically attractive in this regard, because vehicles and their emissions are highly visible and vehicles are also responsible for other problems, such as traffic congestion, noise, and accidents (Bernauer & Koubi 2009;Cao & Prakash 2010). ...
Policies sometimes exempt particular categories of regulatees for reasons of equity and political feasibility. Will the non‐exempt oppose the policy because they shoulder all of the policy costs? We outline an analytic framework for “stress testing” public support among the non‐exempt when they are provided negative information about exemptions and reduced policy effectiveness. Empirically, we study public support for the odd‐even road space rationing policy in India. Using a survey experiment with 2,182 car owners in Bangalore, we find considerable baseline support for this policy. While support among the non‐exempt erodes when they are told about exemptions, there is no additional erosion when they are told that exemptions reduce policy effectiveness. This suggests that the perception of fairness, not policy efficacy, drives the erosion of support among the non‐exempt. Yet the policy survives the stress test because the majority of respondents continue to support it, in spite of support erosion among the non‐exempt.
... Environmental regulations may also allow firms to access foreign markets, enabling them to emphasize their contributions to society while safeguarding trade interests (Urpelainen 2010). These justifications for policy support have hardly been integrated in comparative studies of business preferences for environmental policy, which still largely focus on the immediate economic costs of policy adjustment (Murphy 2004;Cao and Prakash 2010). This is in part due to the simplifying, unidimensional benefit-cost assumption often made to distinguish companies that face more or less material burdens. ...
When do firms oppose international climate policy? Existing work often assumes that firms disapprove of climate regulation due to the immediate costs of compliance. We claim that if policy is implemented gradually, private preferences for climate policy vary as a function of its progressive stringency. That is, supportive views may rise in the initial phase of the policy, while opposing views may emerge as the policy becomes more stringent. We also argue that emissions of individual companies, as well as emissions levels in their respective sectors, influence corporate positions on these two dimensions. We test our argument with new corporate survey data on the European Union Emission Trading Scheme (EU ETS). We find that firms’ views on the performance of the EU ETS vary based on whether they concentrate on the policy’s current state or its future, more stringent development. Moreover, we find that individual firm and sectoral emissions correlate with support for the early-stage, more lenient version of the ETS, but that high-emission firms are more interested in disinvesting and relocating if the ETS becomes stricter. Our findings imply that both firm and sectoral organization can constrain environmental regulation, and that domestic compensation, especially at early stages, can have important effects on the continuity of climate policy.
... The recent development in the policy network literature has opened the opportunities for testing policydiffusion theory with social-network analysis (Lubell et al. 2012), but little theoretical and empirical work has been done to formulate the pathways that networks channel diffusion, except for a small stream of literature on international trade and relations. These studies focused on the diffusion of public-sector downsizing across 26 countries of Organizations for Economic Cooperation and Development (Lee and Strang 2006), policy changes in capital taxation across nations (Cao 2010), the diffusion of pollution intensity across 140 countries (Cao and Prakash 2010), and the spread of domestic regime change (Zhukov and Stewart 2012). But, none of these comparative politics studies have captured the role of public managers and their networks in the diffusion of innovations. ...
Although scholars of policy diffusion have explored the effects of learning, competition, and geographic proximity in the diffusion process, extant theories have not paid enough attention to the roles of the change agents. This study proposes an Agent Network Diffusion (AND) model that explicitly models how leadership transfer networks, a complex system of public managers' career paths, could potentially channel the diffusion of performance innovations. With longitudinal data on government leaders and energy governance performance in Chinese provinces, we empirically test the Portable Innovation Hypotheses using Spatial Autoregressive Models with Temporal Lags. The results demonstrate that leadership transfer networks channel performance innovation between locations where managers served/serve, especially when the institutional environments are similar between the locations. This study contributes to the literature on policy diffusion, management performance, and policy networks by proposing and testing a network-based explanation for policy diffusion with novel empirical methods.
... Studies of environmental politics often use SO 2 Intensity (e.g., Lim, Menaldo, & Prakash, 2015) and it is an appropriate measure for this study for several reasons. First, such emissions are visible to the public and to governments, fostering high levels of awareness (Cao & Prakash, 2010). Second, governments of the world have made strong and longstanding efforts to regulate SO 2 , relative to other pollutants, such as carbon dioxide (CO 2 ) or nitrous oxide (N 2 O). ...
Over the past decade, China has become one of the largest trading partners to countries of Latin America and Sub‐Saharan Africa. A major concern is environmental degradation: much of this trade is composed of pollution‐intensive raw materials and Chinese traders do not promote the adoption of stringent environmental policies among trade partners, as the United States and the European Union do. The probable outcome for China's trade partners is a race to the bottom, whereby trade‐based competitive pressures lead governments to systematically weaken environmental regulations. However, this outcome may be moderated by good governance, as willing and able governments react to heightened pollution‐intensive trade with China by strengthening policies. This study considers whether sound governing institutions offset the harmful effects of trade with China on environmental policy outcomes, using a dataset covering 58 Latin American and Sub‐Saharan African countries over 10 years (2001–2010). Tests focus on the moderating effects of two facets of good governance: representativeness and bureaucratic capacity. The results demonstrate that trade with China does generate a race to the bottom in the environmental policies of partner countries. This effect is moderated by bureaucratic capacity, but not by representativeness.
... However, 13 Our empirical analysis finds that trade openness has no effect on education spending in authoritarian states; nor does it mediate the effect of the trade competition variable defined as the weighted average level of education spending in trade competitor countries. 14 Recent studies show that diffusion mechanisms are present in a variety of areas such as social welfare policies (Brooks 2005;Gilardi 2007;Cao 2010Cao , 2012b, economic liberalization (Way 2005;Simmons 2004;Elkins et al. 2006), financial regulations (Brooks and Marcus 2012), and environmental policies (Busch et al. 2005;Ward and Cao 2012;Cao andPrakash 2010, 2012a). 15 We focus on export competition in this study. ...
This paper explains variations in education spending among non-democracies, focusing on policy interdependence by trade competition. Facing pressures from spending changes in competitor countries, rulers calculate the costs and benefits associated with increased education spending: education increases labor productivity; it also increases civil engagement and chances of democratization. Therefore, we expect that rulers in countries whose revenues depend less on a productive labor force and those with shorter time horizons are less likely to invest because of lower expected benefits; rulers with single-party regimes, authoritarian legislatures, and especially partisan authoritarian legislatures are more likely to invest because such institutions enable them to better survive the threats associated with increased human capital. We find empirical support for policy interdependence and the conditional effects of government revenue source, time horizon, and partisan legislatures.
... The results for the Central Asia countries verify Beck and Joshi (2015). On the other hand, urbanization variable is positive and statistically significant at 10% level only Fixed Effects model and it increases CO2 emissions in Central Asia and this result is in line with the Cao and Prakash (2010). However, analysis suggests that trade openness (tropen) variable is positive and statistically significant at 1% level. ...
Vergi bilinci, bireylerin vergi hakkındaki farkındalık seviyesi biçiminde tanımlanabilir. Kamunun en önemli gelir kaynağı olan vergi bilincine etki eden faktörlerin geçiş ekonomileri için belirlenmesi ve değerlendirilmesi önemlidir. Bu çalışmanın amacı Kırgızistan’da vergi bilincini belirleyen faktörleri incelemek için Kırgızistan Türkiye Manas Üniversitesi İktisadi ve İdari Bilimler Fakültesinden 90 öğrenci ile yürütülmüştür. Çalışmanın deneysel bulguları, öğrenci gruplarının Vergimi Tam Olarak Ödemezsem Devlet Hizmetleri Aksayacaktır önermesinde farklı algıya sahip olduklarını göstermektedir. Bununla birlikte, benzer şekilde öğrenci gruplarının Vergi Oranları Yüksek Olduğu İçin Devlet Vergi Toplayamamaktadır önermesinde de farklılaştıkları belirlenmiştir. Son olarak, bu çalışma mükelleflerin ödedikleri vergilerin farkında olması bakımından gruplar arasında anlamlı farklılık bulunduğunu tespit etmiştir. Çalışma bulguları, aynı zamanda yüksek gelir grubundakilerin Bugün Ödenmeyen Vergiler Gelecek Nesillerin Vergi Yükünü Arttırmasında ve Vergimi Tam Olarak Ödemezsem Devlet Hizmetleri Aksayacaktır önermelerinde en düşük ortanca değere sahip olduğunu göstermektedir.
... Starting in the 1980s, the rise of the Reagan-Thatcher perspective, the "reinventing government" movement, and the alleged "flight" of the manufacturing sector from developed countries to "pollution havens" in developing countries (Cao and Prakash 2010 ;Jaffe et al. 1995 ) led to the emergence of new policy instruments such as VEPs. VEPs compel firms to invest in environmental policies beyond their legal obligations and, in return, offer an environmental branding and reputation (Tremblay-Boire, Prakash, and Gugerty 2016 ) that allows participants to signal their environmental stewardship (Darnall and Kim 2012 ;Potoski and Prakash 2004 ). ...
This article investigates the mechanisms that voluntary environmental program (VEP) participants adopt to reduce pollution. The focus of this article is the 33/50 program, a VEP introduced by the U.S. Environmental Protection Agency in 1991 and discontinued in 1995. The program called for emissions reductions for 17 chemicals reported to the Toxics Release Inventory. Using a sample of approximately 12,000 plants, the relationship between 33/50 program participation and adoption of pollution reduction practices is studied for three time periods, 1991–1995 (program life), 1996–2004, and 2005–2013. These practices include source reduction activities (SRAs) and recycling, recovery, and treatment (RRTs). The major findings are that during the program's life, 33/50 participants showed increased adoption of SRAs and RRTs for both targeted and nontargeted chemicals. However, once the program ended, higher adoption rates persisted for RRTs only, with a shift in emphasis toward treatment over recycling and recovery.
... There is a continuing debate on how engagement with the global economy influences domestic environmental policies. Some scholars find that trade engagement leads to stronger environmental policies (Cao and Prakash 2010), while others find the opposite effect (Andonova, Mansfield, and Milner 2007). Therefore, we control for export salience (exports/GDP) by using data from the World Development Indicators database. ...
How does strength of domestic NGOs influence participation in
the Covenants of Mayors program? Launched by the European
Commission in 2008, this program invites local and regional
authorities to voluntarily commit to implementing EU climate
change and energy policies. We focus on the transitional
countries of Eastern Europe and Eurasia to examine whether
the strength of their domestic NGOs correlates with cities’
decisions to participate in this transnational program. To operationalize
NGO strength, we suggest thinking of it as a stock
variable that cumulates over time, instead of a single-year, flow
variable. With country year as the unit of analysis, we examine
the percentage of urban population covered by the Covenant
across a panel of 26 transitional economies for the period
2008–2014. We find that the key variable of interest, cumulative
NGO strength, is a statistically significant predictor of
program participation, even after controlling for domestic
and international factors, including the salience of international
NGOs and the years since the country began the formal
process to join the European Union.
... What effect does economic globalization have on major industrial accidents? Globalization has long been a subject of great contention as critics assert that it fosters a "race to the bottom" in which the competition for capital, as well as the imperative to lower costs across supply chains, is linked to the competitive lowering of labor and environmental standards (e.g., Cao and Prakash, 2010;Rudra, 2008). Industrial accidents are a particularly tragic result of fierce economic competition and subsequent disregard for work-related regulations. ...
Objectives
Industry‐related accidents are tragically ubiquitous events, yet their underlying causes remain poorly understood. We focus on an important factor associated with the likelihood of industrial hazards: economic globalization. Specifically, we advance multiple hypotheses that suggest that global economic ties as well as the policies that are intended to facilitate these ties increase the likelihood of major industrial accidents as they induce poor governance and the violation of worker safety and regulations.
Methods
We combine data on economic globalization with data on major industrial accidents, and examine the relationship between these variables across 137 countries for the period 1971–2012.
Results
We find a significant positive relationship between economic globalization and the probability of industrial accidents. Results further suggest that the impact of state policies encouraging globalization, such as the removal of barriers to trade and capital flows, is stronger than that of trade and investment flows themselves.
Conclusions
Our results show that a contradiction may exist between the pursuit of integration into the global economy and a key labor right—the right to a safe workplace—and suggest that pro‐globalization policies may exacerbate the governance challenges associated with accident prevention.
... The results for the Central Asia countries verify Beck and Joshi (2015). On the other hand, urbanization variable is positive and statistically significant at 10% level only Fixed Effects model and it increases CO2 emissions in Central Asia and this result is in line with the Cao and Prakash (2010). However, analysis suggests that trade openness (tropen) variable is positive and statistically significant at 1% level. ...
Background
Developing nations have to overcome a number of obstacles to fulfill the Sustainable Development Goals. The Democratic Republic of Congo is one of the five poorest nations in the world and faces several challenges in combating problems related to poverty, health, and sanitation while linking the environment to anthropogenic activities.
Methods
This study analyzes anthropogenic activities and their impact on the environment while providing access to the public health of the Congolese population based on the objectives of sustainable development. Thirty‐five articles were selected for further analysis as well as relative data.
Results
In 2022, 21 million cases of malaria were recorded by the national malaria control program, with 13,000 cases of death. The Democratic Republic of Congo has the highest typhoid incidence, with 315 cases per 100,000 people. A number of 31,342 cases of cholera were reported in 2023, according to multiple reports, with 230 deaths, mainly affecting children. In the same year, a triple epidemic of typhoid, shigellosis, and cholera was identified, with 2389 cases and 52 deaths. These observations cause a health emergency, which can be alleviated and resolved by the establishment of an adequate sanitation system. Waste can be recycled and returned to usable raw materials.
Conclusion
Finally, it will be necessary to establish a water safety management plan to combat all diseases linked to the consumption of nonpotable water and improve national coverage on the treatment of recent cases to reduce and at best avoid observed cases of death.
How does trade affect the making and implementation of environmental policies? I extend our understanding about this broad research question with an understudied case: government support for environmental innovation. As the foremost channel wherein cross-border technology transfer occurs, trade materializes the positive externality of technology investment. With this in mind, countries may tend to strategically underfund environmental technologies—particularly when their trade partners enlarge that spending—to have more money to use otherwise and to avoid politically awkward innovation failures. To substantiate this crowding-out argument, I perform spatial regression with data from 32 OECD countries, 1982–2017, and find that government spending on environmental R&D in one country is negatively correlated with that of the country’s trade partners in environmental goods. My research contributes to the literature by adding new to our understanding about the international trade-environmental policy nexus, depicting a new scenario wherein states underprovide global public goods, and showing the strategic calculus underlying the use of technology-push strategy in addressing climate change.
How does trade affect the making and implementation of environmental policies? I extend our understanding about this broad research question with an understudied case: government support for environmental innovation. As the foremost channel wherein cross-border technology transfer occurs, trade materializes the positive externality of technology investment. With this in mind, countries may tend to strategically underfund environmental technologies—particularly when their trade partners enlarge that spending—to have more money to use other- wise and to avoid politically awkward innovation failures. To substantiate this crowding-out argument, I perform spatial regression with data from 32 OECD countries, 1982–2017, and find that government spending on environmental R&D in one country is negatively correlated with that of the country’s trade partners in environmental goods. Three contributions to the literature are identified and discussed.
Previous research on the sources of foreign policy convergence has focused exclusively on changes at either the dyadic level, between sender and receiver countries, or monadic level of these states. Although such approaches are helpful to understand how states affect foreign policy change in other countries, they generally overlook the third source of foreign policy convergence, that is, the indirect impact of significant events in neighbouring countries. I investigate whether and how leadership visits—a major diplomatic phenomenon—affect foreign policy convergence within and beyond host countries. Specifically, I argue that leadership visits directly facilitate foreign policy convergence in host countries and indirectly produce favourable diffusion effects in their neighbourhood. I develop an original dataset that tracks the visits of high-level officials between China and its foreign counterparts from 1978 to 2014. The results from spatial panel models support my proposed direct and indirect effects whereby Chinese leadership visits are positively associated with foreign policy alignments with China in both host countries and their neighbours.
Advocacy organizations are viewed as actors motivated primarily by principled beliefs. This volume outlines a new agenda for the study of advocacy organizations, proposing a model of NGOs as collective actors that seek to fulfil normative concerns and instrumental incentives, face collective action problems, and compete as well as collaborate with other advocacy actors. The analogy of the firm is a useful way of studying advocacy actors because individuals, via advocacy NGOs, make choices which are analytically similar to those that shareholders make in the context of firms. The authors view advocacy NGOs as special types of firms that make strategic choices in policy markets which, along with creating public goods, support organizational survival, visibility, and growth. Advocacy NGOs' strategy can therefore be understood as a response to opportunities to supply distinct advocacy products to well-defined constituencies, as well as a response to normative or principled concerns.
Advocacy organizations are viewed as actors motivated primarily by principled beliefs. This volume outlines a new agenda for the study of advocacy organizations, proposing a model of NGOs as collective actors that seek to fulfil normative concerns and instrumental incentives, face collective action problems, and compete as well as collaborate with other advocacy actors. The analogy of the firm is a useful way of studying advocacy actors because individuals, via advocacy NGOs, make choices which are analytically similar to those that shareholders make in the context of firms. The authors view advocacy NGOs as special types of firms that make strategic choices in policy markets which, along with creating public goods, support organizational survival, visibility, and growth. Advocacy NGOs' strategy can therefore be understood as a response to opportunities to supply distinct advocacy products to well-defined constituencies, as well as a response to normative or principled concerns.
Advocacy organizations are viewed as actors motivated primarily by principled beliefs. This volume outlines a new agenda for the study of advocacy organizations, proposing a model of NGOs as collective actors that seek to fulfil normative concerns and instrumental incentives, face collective action problems, and compete as well as collaborate with other advocacy actors. The analogy of the firm is a useful way of studying advocacy actors because individuals, via advocacy NGOs, make choices which are analytically similar to those that shareholders make in the context of firms. The authors view advocacy NGOs as special types of firms that make strategic choices in policy markets which, along with creating public goods, support organizational survival, visibility, and growth. Advocacy NGOs' strategy can therefore be understood as a response to opportunities to supply distinct advocacy products to well-defined constituencies, as well as a response to normative or principled concerns.
The possibility that economic competition puts working and employment conditions under pressure is a frequently voiced concern in debates on international trade. We provide an empirical assessment of the argument that competition for world markets has generated a race to the bottom in labor standards. Spatial econometrics is used to identify interdependence in labor practices among trade competitors. We present a strategy for measuring export competition between countries that fulfills several criteria: It reflects actual competition between firms offering similar products, rather than export similarity in relation to a few very broad product categories; it captures not only what competitor countries export but also how much; it takes into account that states are exposed to export competition to different degrees; and it focuses on the downward pressure stemming from a deterioration of labor rights protections among close competitors. To address endogeneity, we implement a two-stage least-squares (2SLS) instrumental variable approach and a difference two-stage generalized method of moments (GMM) approach. We find no evidence that export competition has triggered a race to the bottom in two samples covering most states in the world over nearly three decades. The finding is robust to a variety of alternative specifications.
This study aims to answer the following research question: how do collaborative networks affect the performance of individual policy actors embedded in the network? We examine this question with a unique dataset on water governance in Dongguan city, China. We hypothesize that collaborative network affects the environmental performance of policy actors through a social influence mechanism, and that the performance of an ego actor will emulate that of alters in the network. We test this hypothesis by estimating network/spatial autoregressive models, and the results confirm the presence of a social influence effect.
To what extent do the short-term negative externalities of fossil fuel use traverse national borders? Transnational negative externalities are thought to motivate international environmental cooperation, but we often lack detailed data on their occurrence. Using a Hybrid Single Particle Lagrangian Integrated Trajectory Model (HYSPLIT), we offer global estimates of the extent of transboundary air pollution from coal-fired power generation. In an advance of the existing literature, we attribute the air pollution experienced in different locales to specific coal-fired power plants, allowing us to evaluate the extent to which pollution from the coal industry is experienced across different jurisdictions. Our results indicate that the issue is most severe in South Asia and East Asia. When weighting by the population of “receiving” locations, India is found to be the largest emitter of transboundary air pollution, followed by China. Residents of Bangladesh are found to experience the most transboundary air pollution by a wide margin.
The product composition of bilateral trade encapsulates complex relationships about comparative advantage, global production networks, and domestic politics. Despite the availability of product‐level trade data, most researchers rely on either the total volume of trade or certain sets of aggregated products. In this article, we develop a new dynamic clustering method to effectively summarize this massive amount of product‐level information. The proposed method classifies a set of dyads into several clusters based on their similarities in trade profile—the product composition of imports and exports—and captures the evolution of the resulting clusters over time. We apply this method to two billion observations of product‐level annual trade flows. We show how typical dyadic trade relationships evolve from sparse trade to interindustry trade and then to intra‐industry trade. Finally, we illustrate the critical roles of our trade profile measure in international relations research on trade competition.
Since recent past, a good number of organizations have voluntarily started accepting green practices to make contributions to the environmental well-being by reducing wastes, developing green products, constructing their buildings in the most efficient greener way, recycling their wastes into marketable products and many other ways to make themselves green. Consumers have started demanding for green products and companies are more than happy to satisfy their demand by producing environmentally friendly products. A quest to reduce cost had led to environmentally friendly innovation that has led to a “win-win situation” for all the stakeholders. By going green, companies are attracting more investors to fund them, which would have remained stagnant otherwise without any funds for expansion. In this article, we have examined the main drivers of Corporate Environmentalism (CE) on a global level such as market forces, government and civil regulations. The article discusses the relation between Corporate Environmentalism with stakeholder satisfaction and employee retention and found positive relations among them. Green firms also pressurize their suppliers and other stakeholders to engage in acts of corporate environmentalism to avoid the criticism of green wash. Corporate eco-efficiency brings the benefits of both economic prosperity and environmental protection and states that “A clean environment is actually good for business, for it connotes happy and healthy workers, profits for companies, developing conservation technologies, selling green product and efficiency in material usage”. The article also explains the environmentalism scenario in Indian subcontinent.
One of the great questions for scholars of international relations and economics concerns the relationship between the World Trade Organization (WTO) and the natural environment. Does membership in the multilateral trade regime constrain environmental regulation and increase the environmental burden of national economies? Do countries pay a heavy environmental price for trade liberalization? Although this question has been debated extensively, there is little statistical evidence to contribute the debate. We provide a comprehensive statistical analysis of the environmental effects of joining the multilateral trade regime. We collected data on a variety of environmental policies, institutions, and outcomes that should be influenced by the General Agreementon Tariffs and Trade (GATT)/WTO membership if the predictions of environmental pessimists or optimists are valid. A wide range of statistical models designed to identify the causal effect of the GATT/WTO on the environmental indicators shows that joining the GATT/WTO does not have negative effects on environmental quality.
How does foreign direct investment (FDI) affect the wellbeing of the poor? We address this question by analyzing the impacts of FDI on access to potable water. We predict that higher levels of greenfield FDI in water‐intensive sectors slow the rate of access to potable water in developing countries, with these adverse effects conditional on subnational politics. We hypothesize that this is more likely to occur in polities marked by relatively large poor and marginalized populations, where regulatory capture is more likely to occur. To test our intuition, we analyze subnational data on greenfield FDI in India, confirming that multinational investment in “thirsty” manufacturing sectors are negatively associated with improvements in potable water access. We then present a controlled comparison case study of two Indian states, Kerala and Rajasthan, highlighting the political mechanisms conditioning FDI's effects on potable water.
This article argues that the broad and legally enforceable protection that bilateral investment treaties (BITs) offer to foreign investors worsens the human rights practices of developing countries. BITs lock in initial conditions attractive to investors that are linked to vertical investment flows and investment and trade competition. They also constrain the provision of welfare benefits or basic infrastructure. The lock-in and constraining effects are sources of popular grievance and dissent in states that host foreign investment. BIT-protected investor rights, however, limit the ability of governments to back-down vis-à-vis investors, lowering the relative cost of human rights violations. Finally, this study suggests that democratic regimes mitigate the negative effect of BITs. Evidence from 113 developing countries from 1981 to 2009 supports the hypotheses.
Does globalization just create welfare gains, or is it accompanied by lower accountability, reduced welfare provision, labor standards or human rights? We argue that the broad and legally enforceable protection offered to foreign investors by bilateral investment treaties (BITs) worsens the human rights practices of developing countries. In such countries, BITs lock-in initial conditions attractive to investors that tend to be linked to vertical investment flows and investment and trade competition, including tax incentives and low environmental standards or labor rights. BITs also constrain the provision of welfare benefits, basic infrastructure and investment in environmentally friendly technologies. The lock-in and constraining effects of BITs are sources of popular grievance and dissent in states that host foreign investment. BIT protected investor rights, however, limit the ability of governments to back-down vis-à-vis investors, lowering the relative cost of human rights violations. Finally, we argue that democracies have higher accountability and a lower threat perception for dissent, mitigating the negative effect of BITs. Evidence from 113 developing countries from 1981 to 2009 supports our hypotheses.
Extant scholarship treats national policies concerning labour rights as a function of economic factors and yet neglects influences of policies among economically competing states. Relying on the policy interdependence theory, this study argues that labour rights policy in a state is dependent on its economic competitors’ labour policy decisions. It specifically maintains that the intensifying competition for foreign direct investment and exports as well as against imports channels negative externalities of deteriorating labour protection in competing states which drives expansive downward policy mimicking and leads to a global decline in labour rights – a race to the bottom. Utilising spatial econometric technique to analyse a new data on labour rights for the period 1994–2009, it finds that labour rights practices are interdependent among economic competitors and experience global deteriorations; whereas labour rights laws remain largely independent due to high policy and reputational costs of lowering them and show more fluctuations.
In this study, I examine how domestic regimes mitigate pressure from economically competing states to reduce the protection of labor rights. I argue that democratic states provide higher protection and are more resistant to this downward policy pressure for two main reasons. Directly, democracy empowers workers through freedom of association and enfranchisement. Indirectly, democracy offers better protection of property rights, which lessens the need to use labor rights as an economic incentive. I also argue that this resistance to the downward pressure is more pronounced in practice than in law. These expectations are supported through spatial analyses of a new global dataset on association and collective-bargaining rights for the period 1994–2012. The results remain robust to alternative measures of labor rights, different model specifications, and various econometric estimators.
A recent RIPE article by Jerry Cohen argues that current research on the political economy of money has stagnated because of its overemphasis on the scientific method and domestic variables. We argue that a wide array of scientifically oriented research on the IPE of money considers the system in many different ways. To help build a dialogue, we categorize each of these conceptions of ‘the system’ and give examples of their application from recent research on the IPE of money. Our hope is that this typology will help scholars of different approaches recognize the similarities and differences in their research, beyond simply whether the research is scientific or heterodox.
Globalisierung ist ein Prozess der Staaten näher aneinander rückt. Die Ursachen dieses Prozesses liegen in technologischen Innovationen und politischen Maßnahmen, die eine Erleichterung des grenzüberschreitenden Austauschs zwischen den Ländern erlauben. Indem sich Länder durch Wettbewerb, Lernen, Nachahmung und zum Teil auch durch Zwang an anderen Ländern orientieren, kann es zu einer Angleichung von Politiken kommen oder auch zu politischen Prozessen, die die Politik in den einzelnen Länder durch internationales Regieren (global governance) bestimmen.
Die internationale Diffusion von Politiken hat in den letzten Jahrzehnten eine erhöhte Aufmerksamkeit in der Politikwissenschaft erhalten. Allerdings wird dabei oftmals die konzeptionelle und methodologische Voraussetzung einer Diffusionsanalyse wenig beachtet. In diesem Beitrag wird insbesondere auf diese Aspekte eingegangen, indem dargestellt wird, dass eine Diffusionsanalyse die etablierte funktionale Analyse durch eine relationale ergänzt. Dieser analytische Zugang fordert dann auch einen Perspektivwechsel in der methodologischen Behandlung von Diffusion. In der quantitativen Analyse wurden anhand von spatial lag und dyadischen Regressionen neue Analysetechniken entwickelt und in der qualitative Forschung verschiebt sich der Fokus auf die Erfassung von relationalen Kausalpfaden. Konzeptionelle Orientierung der Analyse von Diffusion wird anhand von Kausalmechanismen gegeben, die auch in diesem Beitrag dargestellt werden. Schließlich weist der Aufsatz auf Defizite und die mögliche weitere Entwicklung der Diffusionsforschung hin.
Reports results from a quantitative network analysis of international commodity trade flows designed to measure the structure of the world economic system and to identify the roles that particular countries play in the global division of labor. It improves on previous network-analytic studies of the world-economy in two ways. First, by using a newly developed measure of regular equivalence, this operationalization of a nation's roles in the international system is methodologically superior to previous work. Second, we have built a dynamic aspect into the analysis by examining international trade networks at more than one point in time (1965, 1970, and 1980). This allows us to answer questions about change both in the overall structure of the world-economy and in the positions of particular countries in the system. -from Authors
We present a blockmodel of the world system circa 1965 that is based on four types of international networks: trade flows,military intervention, diplomatic relations, and conjoint treaty memberships. We then report regression analysis of the effects of these structural positions on nations' economic growth (change in GNP per capita) from 1955 to 1970. Net of other plausible determinants, these effects are large in magnitude and entirely consistent with world-system/dependency theories. Further analyses reinforce the interpretation of these findings as the structural, accumulative advantage of location in the core over that in the periphery. Substantively, our results suggest that exogentic theories of economic growth are even more powerful than previous analyses have indicated. -Authors
This article reports results from a quantitative network analysis of international commodity trade flows designed to measure
the structure of the world economic system and to identify the roles that particular countries play in the global division
of labor. It improves on previous network-analytic studies of the world-economy in two ways. First, by using a newly developed
measure of regular equivalence, this operationalization of a nation's roles in the international system is methodologically
superior to previous work. Second, we have built a dynamic aspect into the analysis by examining international trade networks
at more than one point in time (1965,1970, and 1980). This allows us to answer questions about change both in the overall
structure of the world-economy and in the positions of particular countries in the system. Our findings generally conform
to the theoretically expectations of the world-system perspective as well as qualitative descriptions of recent changes in
the international division of labor.
In a relatively small but growing body of literature in political science and environmental studies, scholars debate the effect of democracy on environmental degradation. Some theorists claim that democracy reduces environmental degradation. Others argue that democracy may not reduce environmental degradation or may even harm the environment. Empirical evidence thus far has been limited and conflicting. This article seeks to address the democracy–environment debate. We focus on the effect of political regime type on human activities that directly damage the environment. Our discussion of the theoretical literature identifies different causal mechanisms through which democracy could affect environmental degradation. The empirical analysis focuses on the net effect of these competing mechanisms. We examine statistically the effect of democracy on five aspects of human-induced environmental degradation—carbon dioxide emissions, nitrogen dioxide emissions, deforestation, land degradation, and organic pollution in water. We find that democracy reduces all five types of environmental degradation. While the substantive effect of democracy is considerable, it varies in size across different types of environmental degradation. We also find nonmonotonic effects of democracy that vary across the environmental indicators.
The recent surge in studies analysing spatial dependence in political science has gone hand-in-hand with increased attention paid to the choice of estimation technique. In comparison, specification choice has been relatively neglected, even though it leads to equally, if not more, serious inference problems. In this article four specification issues are analysed. It is argued that to avoid biased estimates of the spatial effects, researchers need to consider carefully how to model temporal dynamics, common trends and common shocks, as well as how to account for spatial clustering and unobserved spatial heterogeneity. The remaining two specification issues relate to the weighting matrix employed for the creation of spatial effects: whether it should be row-standardised and what functional form to choose for this matrix. The importance of these specification issues is demonstrated by replicating Hays' model of spatial dependence in international capital tax rate competition. Seemingly small changes to model specification have major impacts on the spatial effect estimates. It is recommended that spatial analysts develop their theories of spatial dependencies further to provide more guidance on the specification of the estimation model. In the absence of sufficiently developed theories, the robustness of results to specification changes needs to be demonstrated.
One of the most important developments over the past three decades has been the spread of liberal economic ideas and policies throughout the world. These policies have affected the lives of millions of people, yet our most sophisticated political economy models do not adequately capture influences on these policy choices. Evidence suggests that the adoption of liberal economic practices is highly clustered both temporally and spatially. We hypothesize that this clustering might be due to processes of policy diffusion. We think of diffusion as resulting from one of two broad sets of forces: one in which mounting adoptions of a policy alter the benefits of adopting for others and another in which adoptions provide policy relevant information about the benefits of adopting. We develop arguments within these broad classes of mechanisms, construct appropriate measures of the relevant concepts, and test their effects on liberalization and restriction of the current account, the capital account, and the exchange rate regime. Our findings suggest that domestic models of foreign economic policy making are insufficient. The evidence shows that policy transitions are influenced by international economic competition as well as the policies of a country's sociocultural peers. We interpret the latter influence as a form of channeled learning reflecting governments' search for appropriate models for economic policy.
In this paper, we demonstrate the econometric consequences of different specification and estimation choices in the analysis
of spatially interdependent data and show how to calculate and present spatial effect estimates substantively. We consider
four common estimators—nonspatial OLS, spatial OLS, spatial 2SLS, and spatial ML. We examine analytically the respective omitted-variable
and simultaneity biases of nonspatial OLS and spatial OLS in the simplest case and then evaluate the performance of all four
estimators in bias, efficiency, and SE accuracy terms under more realistic conditions using Monte Carlo experiments. We provide
empirical illustration, showing how to calculate and present spatial effect estimates effectively, using data on European
governments' active labor market expenditures. Our main conclusions are that spatial OLS, despite its simultaneity, performs
acceptably under low-to-moderate interdependence strength and reasonable sample dimensions. Spatial 2SLS or spatial ML may
be advised for other conditions, but, unless interdependence is truly absent or minuscule, any of the spatial estimators unambiguously,
and often dramatically, dominates on all three criteria the nonspatial OLS commonly used currently in empirical work in political
science.
Recent optimism about sustainability has centred on the opportunities for improvements in environment efficiency through the international diffusion of environmentally beneficial innovations. This paper investigates two claims about the conditions under which countries are most likely to realise these gains. First, ‘dirtier’ economies should improve their environment efficiency faster as they adopt environmentally sound technologies and policies similar to those in ‘cleaner’ countries, resulting in catch-up and convergence over time. Second, transnational linkages accelerate the international spread of environmentally beneficial innovations and, therefore, improvements in environment efficiency. To test these claims, we use econometric techniques to examine the dynamics and determinants of two pollutants—CO 2 and SO 2 —using a panel comprising up to 114 countries over the period 1980 – 2000. Our empirical findings broadly support both claims. Applying tests of unconditional convergence, we find robust evidence for convergence in levels of CO 2 and SO 2 efficiency, indicating catch-up by less pollution-efficient economies over time. Similarly, confirming claims about transnational linkages, we find that imports from more pollution-efficient countries and telecommunications connectivity are associated with faster improvements in domestic CO 2 and SO 2 efficiency. Results also suggest that inward foreign direct investment is positively associated with CO 2 efficiency. Yet we find that exports to countries with high levels of pollution efficiency have no discernable effect on domestic pollution efficiency.
We analyze the connection between productivity, pollution abatement expenditures, and other measures of environmental regulation for plants in three industries (paper, oil, and steel). We examine data from 1979 to 1990, considering both total factor productivity levels and growth rates. Plants with higher abatement cost levels have significantly lower productivity levels. The magnitude of the impact is somewhat larger than expected: 1.74 in lower productivity for paper mills, 3.28 for steel mills. However, these results apply only to variation across plants in productivity levels. Estimates looking at productivity variation within plants over time, or estimates using productivity growth rates show a smaller (and insignificant) relationship between abatement costs and productivity. Other measures of environmental regulation faced by the plants (compliance status, enforcement activity, and emissions) are not significantly related to productivity.
This survey assesses evidence on the linkage between environmental regulation and competitiveness, and finds little support for the conventional wisdom that environmental regulations have large adverse effects on competitiveness. Studies examining the effects of environmental regulations on net exports, overall trade flows, and plant-location decisions have produced estimates that are small, statistically insignificant, or not robust. We also find no systematic evidence supporting the revisionist hypothesis that environmental regulations stimulate innovation and improved competitiveness. Overall, the evidence suggests that the truth regarding the relationship between environmental protection and international competitiveness lies in between the extremes of the current debate.
We examine change in the size of the public sector between 1980 and 1997 across twenty-six Organization for Economic Cooperation and Development (OECD) member nations, with particular attention to diffusion dynamics. General method of moments (GMM) analyses demonstrate imitation of shifts in government employment within the United States and mutual influence among nations that are geographically proximate and that trade extensively. Disaggregated analyses show that downsizing is contagious while upsizing is not: proximate downsizers but not upsizers are imitated, and states act on evidence that downsizing is economically beneficial while ignoring evidence that it is harmful. We argue that these asymmetries in emulation and learning are a product of the dominance of neoliberal and managerialist discourses that legitimate and theorize shrinking the public sector.An earlier version of this article was given at the International Diffusion of Political and Economic Liberalization Conference, Harvard University, October 2003. We thank Frank Dobbin, Geoffrey Garrett, and Beth Simmons for organizing the conference and this symposium; Sarah Babb, Jeeyang Baum, Torben Iversen, Michael Mann, Steve Morgan, Fred Pampel, Deok-Seob Shim, conference participants, and IO s editor and reviewers for their helpful comments; and Thomas Cusack for his generosity in sharing public employment data.
While many herald globalization the increasing interconnectedness of national economies to be associated with rising standards of living across the globe, others fear its effects on sustainability. Antiglobalization forces and environmentalists view these developments as a threat to the welfare of future generations because of profligate and excessive current consumption. This study is the first to estimate the effects of dependence on trade, foreign direct investment (FDI), and an index of economic freedom on the World Bank s measure of sustainability (the genuine savings rate), which measures the rate at which investment in the total stock of manufactured, human, and natural capital exceeds its depreciation. Contrary to pessimists fears, our indicators of economic openness show positive effects on sustainability, results that are robust to sample size, testing procedure, and several alternative specifications. The results support those who suggest that distorted economies tend to be both inefficient and damaging to future generations. If increasing trade, FDI, and economic freedom are hallmarks of globalization, then worries about its effects on future well-being are misplaced.Equal authorship. We are grateful to Erich Weede, Rick Auty, Simon Dietz, Paul Hensel, Jonathan Moses, Ragnar Torvik, Jostein Vik, Paivi Lujala, two reviewers, and the editor for comments and suggestions. The anonymous reviewers were extraordinarily constructive. Any remaining errors are entirely our fault. The data are available at http: www.svt.ntnu.no iss Indra.de.Soysa default.htm .
Growing evidence demonstrating clear threats to the sustainability of the ecosystems supporting human societies has given rise to a variety of sociological theories of human-environment interactions. These environmental impact theories fall into three general perspectives: human ecology, modernization, and political economy. These theories, however, have not been empirically tested in a common analytic framework. Here, a framework that relies on ecological principles is adopted and modified. Using a revised stochastic formulation of that framework and the most comprehensive measure of environmental impact to date—the ecological footprint—the factors driving the environmental impacts of societies are assessed. The overall findings support the claims of human ecologists, partially support the claims of political economists, and contradict the claims of modernization theorists. Basic material conditions, such as population, economic production, urbanization, and geographical factors all affect the environment and explain the vast majority of cross-national variation in environmental impact. Factors derived from neo-liberal modernization theory, such as political freedom, civil liberties, and state environmentalism have no effect on impacts. Taken together, these findings suggest societies cannot be sanguine about achieving sustainability via a continuation of current trends in economic growth and institutional change.
In theory, environmental control costs encourage reduced specialization in the production of polluting outputs in countries with stringent environmental regulations (Pethig, 1976; Siebert, 1977; McGuire, 1982). In contrast, countries that fail to undertake an environmental protection program presumably increase their comparative advantage in the production of items that damage the environment. This relationship between trade and environmental policy receives considerable attention whenever countries are in the process of passing new pollution control measures. Groups who oppose existing measures or the implementation of stiffer measures argue that they reduce the ability of polluting industries to compete internationally. ² With foreign trade an increasingly important sector in many of the world’s economies, the arguments of such groups are now frequently weighted very heavily.
Voluntary programs have become widespread tools for governments and nongovernmental actors looking to improve industry's environmental and regulatory performance. Voluntary programs can be conceptualized as club goods that provide nonrival but potentially excludable benefits to members. For firms, the value of joining a green club over taking the same actions unilaterally is to appropriate the club's positive brand reputation. Our analysis of about 3,700 U.S. facilities indicates that joining ISO 14001, an important nongovernmental voluntary program, improves facilities' compliance with government regulations. We conjecture that ISO 14001 is effective because its broad positive standing with external audiences provides a reputational benefit that helps induce facilities to take costly progressive environmental action they would not take unilaterally.
The persistence of growth and its equity and environmental effects heavily depend on the composition of asset investments. Physical, human, and natural capital are the key assets behind the development process. Market failures tend to affect the accumulation of such assets asymmetrically, leading to underinvestment in human and natural capital. Public policy in Latin America has generally exacerbated such market failures by promoting physical capital investments using massive public subsidies instead of relying on the expansion of public and semipublic assets that complement physical capital. The result: economic stagnation, deep social inequities and environmental destruction.
This article examines whether commercial openness has affected environmental policy in the postcommunist countries of Central and Eastern Europe and the Commonwealth of Independent States. During the Cold War, these countries had closed trade regimes combined with little environmental regulation and poor environmental quality. Since the fall of the Berlin Wall and the breakup of the Soviet Union, many postcommunist countries have engaged in extensive trade liberalization. Some countries, however, have been slower to open their markets, and others have maintained highly protectionist trade policies. Have countries that opened up to global markets improved their environmental policies, or has increasing exposure to the international trading system undermined efforts to improve environmental policy? The results indicate that trade openness undermined a key element of environmental policy in the region by reducing governments' ability to collect environmental taxes and support environmental investments.
We use panel data on ISO 9000 quality certification in 85 countries between 1993 and 1998 to better understand the cross-national diffusion of an organizational practice. Following neoinstitutional theory, we focus on the coercive, normative, and mimetic effects that result from the exposure of firms in a given country to a powerful source of critical resources, a common pool of relevant technical knowledge, and the experiences of firms located in other countries. We use social network theory to develop a systematic conceptual understanding of how firms located in different countries influence each other's rates of adoption as a result of cohesive and equivalent network relationships. Regression results provide support for our predictions that states and foreign multinationals are the key actors responsible for coercive isomorphism, cohesive trade relationships between countries generate coercive and normative effects, and role-equivalent trade relationships result in learning-based and competitive imitation.
Systems of private regulation based on certification have recently emerged to address environmental issues in the forest products industry and labor issues in the apparel industry. To explain why the same regulatory form has emerged across these fields, the author uses a historical and comparative case study approach, closely examining early moments and paying attention to “roads not taken.” Two types of factors led to the initial emergence of private certification: (1) social movement campaigns targeting companies and (2) a neo-liberal institutional context. The analysis shows specific ways in which these factors led states, nongovernmental organizations, and companies to build or support certification associations.
Globalization critics argue that international trade spurs a race to the bottom among national environmental standards. ISO 14001 is the most widely adopted voluntary environmental regulation which encourages firms to take environmental action beyond what domestic government regulations require. Drawing on a panel study of 108 countries over seven years, we investigate conditions under which trade linkages can encourage ISO 14001 adoption, thereby countering environmental races to the bottom. We find that trade linkages encourage ISO 14001 adoption if countries' major export markets have adopted this voluntary regulation.
Growing evidence demonstrating clear threats to the sustainabilily of the ecosystems supporting human societies has given rise to a variety of sociological theories of human-environment interactions. These environmental impact theories fall into three general perspectives: human ecology, modernization, and political economy. These theories, however, have not been empirically tested in a common analytic framework. Here, a framework that relies on ecological principles is adopted and modified. Using a revised stochastic formulation of that framework and the most comprehensive measure of environmental impact to date-the ecological footprint-the factors driving the environmental impacts of societies are assessed. The overall findings support the claims of human ecologists, partially support the claims of political economists, and contradict the claims of modernization theorists. Basic material conditions, such as population, economic production, urbanization, and geographical factors all affect the environment and explain the vast majority of cross-national variation in environmental impact. Factors derived from neo-liberal modernization theory, such as political freedom, civil liberties, and state environmentalism have no effect on impacts. Taken together, these findings suggest societies cannot be sanguine about achieving sustainability via a continuation of current trends in economic growth and institutional change.
One school of thought in the literature on regulatory competition in environmental and consumer policy argues that inter-jurisdictional competition promotes regulatory laxity. The other highlights rent-seeking as a major driving force, implying that regulatory laxity is rare because rent-seeking is omnipresent. We observe that in most areas of environmental and consumer policy in advanced industrialized countries regulation has become much stricter since the 1970s. What then has been driving environmental and consumer risk regulation up? A popular explanation holds that large green jurisdictions have been forcing their trading partners to trade or ratchet up their regulation. In addition, political economists have developed bottom up explanations focusing on interest group politics and corporate behaviour. This article adds to the latter line by endogenising public perceptions and by exploring the effects of corporate environmental performance strategies on environmental and consumer risk policy. The empirical relevance of propositions is illustrated with case studies on growth hormones, electronic waste, and food safety.
This article reports results from a network analysis of international trade from 1965 through 2000. It addresses the impact of changes associated with globalization and the "new international division of labor" (NIDL) on structural inequality in the world economy. To assess this impact, I ask three specific questions. (1) Do patterns of international trade conform to a core/periphery structure through time? (2) Does the structure exhibit inequality with regard to industrial sophistication? (3) Have globalization and the NIDL encouraged upward mobility for historically poor countries, or have they reproduced a stable set of structural positions? The findings support the view that the NIDL and globalization have benefited a few exceptional countries while at the same time producing structural inequality.
Interdependence is ubiquitous, and often central, across comparative politics. In comparative political economy, for example, globalization and rising capital mobility imply tax competition that suggests the fiscal policies of one country must depend crucially upon those of other countries with which it competes for capital. This paper shows this theoretically and, more generally, how any situation involving externalities from one unit's actions on others' implies interdependence. Positive/negative externalities induce negative/positive interdependence, which spurs competitive-races/free-riding, with corresponding early/late-mover advantages, and so strategic rush-to-act/delay-and-inaction. We show next how to model such interdependent processes empirically, that not doing so risks severe omitted-variable biases that erroneously favor domestic and exogenous-external accounts over interdependence but that doing so naïvely risks simultaneity biases with the opposite substantive implications. Then we discuss how to estimate properly specified interdependence models with spatial lags by maximum likelihood and, finally, how to interpret and present the resulting estimated spatio-temporally dynamic effects, response paths, and long-run steady-states, with their associated standard errors. We illustrate all this by replicating a noteworthy earlier, non-spatial, study of capital-tax competition. Web appendices contain further technical details, literature survey, data, statistical-software code, and spreadsheet templates for conducting all estimation and calculation procedures.
This article examines several of the key hypotheses suggested by the race to the bottom theory in environmental regulation. The research studies annual state-level enforcement of federal air, water, and hazardous waste pollution control regulation, covering the period from 1985 to 2000. Specifically, the study estimates a series of strategic interaction models to examine whether a state's environmental regulatory behavior is influenced by the regulatory behavior of the states with which it competes for economic investment. While there is clear evidence of strategic interaction in state environmental regulatory behavior, states do not respond in the asymmetric manner suggested by the race to the bottom theory.
Although spatial econometrics is being used more frequently in political science, most applications are still based on geographic notions of distance. Here we argue that it is often more fruitful to consider political economy notions of distance, such as relative trade or common dyad membership. We also argue that the spatially autoregressive model usually (but not always) should be preferred to the spatially lagged error model. Finally, we consider the role of spatial econometrics in analyzing time-series–cross-section data, and show that a plausible (and testable) assumption allows for the simple introduction of space (however defined) into such analyses. We present examples of spatial analyses involving trade and democracy.
An implicit assumption of most policy analysts and some academics is that globalization leads to a convergence of traditionally national policies governing environmental regulation, consumer health and safety, the regulation of labor, and the ability to tax capital. Some claim that globalization leads to a race to the bottom, where concerns about the regulatory standards are sacrificed on the altar of commerce. Others argue that the growth of transnational governance structures leads to a negotiated convergence of ample regulation. This essay reviews the arguments and evidence for how globalization affects the convergence of regulatory policies, in particular the setting of labor and environmental standards. It argues that the theories of policy convergence, which rely on structural factors to induce policy convergence, are largely unsupported by the empirical evidence. Theories that grant agents autonomous decisionmaking power perform better but remain underspecified. Ironically, the realist paradigm, which has generally denigrated the globalization phenomenon, could prove a fruitful source for theories of improved policy convergence.
We examine whether U.S. states are engaged in strategic environmental policymaking. In particular, do states incorporate the stringency of environmental policies in neighboring states into their own decision calculus? Our analysis suggests that states are influenced by their neighbors—both contiguous and regional neighbors—and the effect operates within a five year window. Moreover, the response is asymmetric. States are “pulled” to higher levels of abatement costs by improvements in neighbors with regulations that are already relatively stringent. Improvements by states with relatively lax regulations have no effect on their neighbors' environmental policymaking.
We empirically test existing theories on the provision of public goods, in particular air quality, using data on sulfur dioxide (SO2) concentrations from the Global Environment Monitoring Projects for 107 cities in 42 countries from 1971 to 1996. The results are as follows: First, we provide additional support for the claim that the degree of democracy has an independent positive effect on air quality. Second, we find that among democracies, presidential systems are more conducive to air quality than parliamentary ones. Third, in testing competing claims about the effect of interest groups on public goods provision in democracies we establish that labor union strength contributes to lower environmental quality, whereas the strength of green parties has the opposite effect.
This article examines whether democracies contribute more to the provision of global public goods. It thus contributes to the debate on the effects of domestic institutions on international cooperation. The focus is on human-induced climate change, in Stern's words Using new data on climate change cooperation we study a cross-section of 185 countries in 1990 words-deeds gaps also in other policy areas, and whether there are systematic differences of this kind between domestic and international commitments and across different policy areas.
"Voluntary programs have become widespread tools for governments and non-governmental actors looking to shape industry behavior. Voluntary programs can be conceptualized as club goods that provide non-rival but potentially excludable benefits to members. For firms, the value of joining an effective green club over taking the same actions unilaterally is to appropriate the club's positive reputation with stakeholders. Our analysis of about 3,800 US facilities indicates that joining ISO 14001, an important non-governmental voluntary program, improves facilities' compliance with government regulations. We conjecture that ISO 14001 's efficacy stems from its relatively open membership standards and its focus on management systems that provide participants with private benefits while addressing the root causes of regulatory non-compliance. Many government sponsored voluntary programs may be designed to fail because their rigid standards exclude all but highly compliant firms and their focus on performance standards ignores key causes of regulatory non-compliance."
Over the past forty-five years, bilateral investment treaties (BITs) have become the most important international legal mechanism for the encouragement and governance of foreign direct investment. Their proliferation over the past two decades in particular has been phenomenal. These intergovernmental treaties typically grant extensive rights to foreign investors, including protection of contractual rights and the right to international arbitration in the event of an investment dispute. How can we explain the diffusion of BITs? We argue that the spread of BITs is driven by international competition among potential host countries - typically developing countries - for foreign direct investment. We design and test three different measures of economic competition. We also look for indirect evidence of competitive pressures on the host to sign BITs. The evidence suggests that potential hosts are more likely to sign BITs when their competitors have done so. We find some evidence that coercion plays a role, but less support for learning or cultural explanations. Our main finding is that diffusion in this case is associated with competitive economic pressures among developing countries to capture a share of foreign investment. We are agnostic at this point about the benefits of this competition for development.
The ASL database provides continuous time-series of sulfur emissions for most countries in the World from 1850 to 1990, but academic and official estimates for the 1990s either do not cover all years or countries. This paper develops continuous time series of sulfur emissions by country for the period 1850-2000 with a particular focus on developments in the 1990s. Global estimates for 1996-2000 are the first that are based on actual observed data. Raw estimates are obtained in two ways. For countries and years with existing published data I compile and integrate that data. Previously published data covers the majority of emissions and almost all countries have published emissions for at least 1995. For the remaining countries and for missing years for countries with some published data, I interpolate or extrapolate estimates using either an econometric emissions frontier model, an environmental Kuznets curve model, or a simple extrapolation, depending on the availability of data. Finally, I discuss the main movements in global and regional emissions in the 1990s and earlier decades and compare the results to other studies. Global emissions peaked in 1989 and declined rapidly thereafter. The locus of emissions shifted towards East and South Asia, but even this region peaked in 1996. My estimates for the 1990s show a much more rapid decline than other global studies, reflecting the view that technological progress in reducing sulfur based pollution has been rapid and is beginning to diffuse worldwide.
Critics assert that globalization is detrimental to the environment because it encourages location of polluting industries in countries with low environmental regulations. We suggest that globalization might also have positive environmental effects because global ties increase self-regulation pressures on firms in low-regulation countries. Using survey data from firms in China we find that multinational ownership, multinational customers, and exports to developed countries increase self-regulation of environmental performance.© 2001 JIBS. Journal of International Business Studies (2001) 32, 439–458
This paper investigates how openness to international goods markets affects pollution concentrations. We develop a theoretical model to divide trade's impact on pollution into scale, technique, and composition effects and then examine this theory using data on sulfur dioxide concentrations. We find international trade creates relatively small changes in pollution concentrations when it alters the composition of national output. Estimates of the trade-induced technique and scale effects imply a net reduction in pollution from these sources. Combining our estimates of all three effects yields a somewhat surprising conclusion: freer trade appears to be good for the environment.
I offer an explanation for the widespread diffusion of neoliberal tax policies in the developed democracies. After accounting for the policy influences of commonly experienced domestic and international forces, I consider several plausible paths of diffusion of neoliberal tax structure. My central argument is that the highly visible 1980s market-conforming tax reform in the United States should be especially important in shaping subsequent tax policies in other polities. There are substantial reasons to believe, however, that domestic political and institutional forces will shape policy-maker assessment of the benefits and costs of neoliberal reforms: the strength of right parties and the degree to which the median voter has moved right should condition adoption of neoliberal tax policy; the institutions of national and sector-coordinated capitalism should also slow the enactment of neoliberal tax reforms. I assess these arguments with empirical models of 1981-98 tax rates on capital in sixteen nations. I find that changes in U.S. tax policy influence subsequent reforms in other polities; in the long term, all nations move toward the U.S. neoliberal tax structure. Analysis also shows, however, that the short-term responsiveness to U.S. tax reforms is notably greater where uncoordinated market institutions are dominant. Theory and extensive qualitative and quantitative evidence indicate that pressures to compete for mobile assets, as balanced against the economic and political costs of adoption, anchor the process of diffusion of neoliberal tax policy. There is little evidence for the view that systematic policy learning or social emulation drove tax policy diffusion.
The relationship between trade liberalisation and the environment has been the subject of a growing body of literature in recent years. One particular focus of attention has been whether environmental regulations are influencing patterns of international trade. This paper aims to examine this issue in the context of the Heckscher-Ohlin-Vanek (HOV) model of trade, but also in a ‘new’ trade model characterised by monopolistic competition and differentiated products. Our use of the HOV model improves upon a well cited study by Tobey (1990) in many ways, not least by allowing for the possible endogeneity of environmental regulations. We find no significant relationship between such regulations and ‘dirty’ net exports. The ‘new’ trade model explains the presence of both intra- and inter-industry trade and we again allow for the possible endogeneity of regulations. We believe this to be the first study to assess the role of environmental regulations within a ‘new’ trade model, but also the first to allow for the endogeneity of regulations in a cross-country model of trade. We find environmental regulations to be a statistically significant determinant of the share of inter-industry trade (net trade) and we find this significance to increase when endogeneity is controlled for.
The premise that trade suffers from the imposition of environmental policy has a strong element of a priori plausibility, but, surprisingly, has little empirical support. The present paper provides an empirical test of the hypothesis that stringent environmental policy has caused trade patterns to deviate in commodities produced by the world's "dirty" industries. The empirical tests are conducted using the cross-section Hechscher-Ohlin-Vanek model of international trade. It is not that the introduction of stringent environmental control measures has caused trade patterns to deviate from the Hechscher-Ohlin-Vanek predictions. Copyright 1990 by WWZ and Helbing & Lichtenhahn Verlag AG
Over the past forty-five years, bilateral investment treaties (BITs) have become the most important international legal mechanism for the encouragement and governance of foreign direct investment. The proliferation of BITs during the past two decades in particular has been phenomenal. These intergovernmental treaties typically grant extensive rights to foreign investors, including protection of contractual rights and the right to international arbitration in the event of an investment dispute. How can we explain the widespread adoption of BITs? We argue that the spread of BITs is driven by international competition among potential host countries typically developing countries for foreign direct investment. We propose a set of hypotheses that derive from such an explanation and develop a set of empirical tests that rely on network measures of economic competition as well as more indirect evidence of competitive pressures on the host to sign BITs. The evidence suggests that potential hosts are more likely to sign BITs when their competitors have done so. We find some evidence that coercion and learning play a role, but less support for cultural explanations based on emulation. Our main finding is that the diffusion of BITs is associated with competitive economic pressures among developing countries to capture a share of foreign investment. We are agnostic at this point about the benefits of this competition for development.For useful comments on earlier drafts of this article, we thank Bill Bernhard, Bear Braumoeller, Frank Dobbin, Robert Franzese, Jeffry Frieden, Geoffrey Garrett, Tom Ginsburg, Jude Hays, Lisa Martin, Bob Pahre, Mark Ramsayer, Steven Ratner, Susan Rose-Ackerman, and John Sides. For research assistance, we thank Elizabeth Burden, Raechel Groom, and Alexander Noonan.
Some believe that relatively lenient environmental standards give developing countries a comparative advantage in pollution–intensive goods. Thus, freer trade will harm their environment. This paper brings together the literature on openness and growth, and on the environmental Kuznet’s curve, to demonstrate that the opposite may be true. A simultaneous–equations system is derived which incorporates multiple effects of trade liberalization on the environment. Estimation using pooled provincial data on Chinese water pollution, suggests that freer trade aggravates environmental damage via the terms of trade, but mitigates it via income growth. Simulations suggest that the net effect in China was beneficial. JEL Classification: Fl3, Q28, 0l9
Est–ce que la libéralisation du commerce est nuisible pour l’environnement? Un nouveau test. Certains croient que des normes environnementales relativement peu contraignantes donnent un avantage comparatif aux pays en voie de développement dans la production de biens qui polluent intensivement. Donc, un commerce plus libre contribuera à nuire à l’environnement. Ce mémoire synthétise la littérature spécialisée sur l’ouverture des marchés et la croissance, ainsi que sur la courbe de Kuznets, pour montrer que l’inverse est vrai. On dérive un système d’équations simultanées qui incorpore les multiples effets de la libéralisation du commerce sur l’environnement. La calibration de ce système, en utilisant de manière intégrée les données provinciales de pollution de l’eau en Chine, suggère qu’un commerce plus libre aggrave l’état de l’environnement par le truchement du jeu des termes d’échange, mais que cet effet est mitigé par l’effet de croissance des revenus. Des simulations suggèrent que l’effet net en Chine est positif.
Miles+ 1998+ Modeling Races to the Bottom+ Manuscript+ Available at ^http:00irps+ucsd+edu0
- Kahler
Kahler, Miles+ 1998+ Modeling Races to the Bottom+ Manuscript+ Available at ^http:00irps+ucsd+edu0
assets001406739+pdf&+ Accessed 2 April 2010+
- Lake