Balancing competitiveness and conditionality : environmental policymaking in low-regulating countries

Abstract

This article scrutinizes the effects of economic competition on environmental standard levels in low-regulating states that intensify their economic interlinkage with high-regulating countries. In doing so, it pursues two objectives. First, we provide a detailed empirical account of the impact of economic integration on the development of environmental standards in Hungary and Mexico. Second, we offer a theoretical argument in order to explain why low-regulating countries avoid problems of remaining stuck at the bottom , although regulatory competition is effective. We argue that missing races to the bottom or stuck at the bottom effects in low-regulating countries are the result of conditionality pressures exerted by high-regulating countries. At the same time, however, low-regulating countries attempt to preserve their comparative advantage through the back door by cultivating a lax enforcement practice.