Policy Diffusion of Automobile Emission Standards: Is there a Race to the Top?
Authors
Saikawa, E
Lab Members
E. Saikawa
Abstract
THE conventional wisdom is that globalization leads to a “race to the bottom” of environmental policies because environmental regulations are costly. Due to economic competition, the thinking goes, equilibrium at the “lowest common denominator” based on the “policies of the most laissez-faire country” should ensue.1 However, mixed empirical results have raised questions about the validity of the conventional wisdom.2 The literature on regulatory competition has burgeoned in recent years, and researchers now debate whether there are races to the bottom or to the top.3 Some argue that there is a race to the top among a number of developed countries over domestic environmental regulations. Prakash and Potoski4 argue that countries adopt ISO 14001—a voluntary environmental regulation—when their major export markets have adopted them. As yet, however, no scholars have included developing countries in their analysis, let alone conducted rigorous, quantitative studies to test this hypothesis of compulsory—not voluntary—environmental standards.5 In this article, I fill this gap and find that there is indeed a race to the top of automobile emission regulations, including in developing countries.