EFFECT OF ENVIRONMENTAL REGULATIONS ON STATE- LEVEL MANUFACTURING CAPITAL FORMATION*

ABSTRACT We quantify the effect of environmental regulations on regional capital formation in the manufacturing sector. Our model integrates environmental regulations into a choice-theoretic model derived from Tobin's q theory of investment. It is postulated that more stringent environmental regulations raise the firm's cost of production both directly and indirectly, thus reducing the firm's q value and lowering the rate of capital formation. The empirical results indicate that the effect of environmental regulations on net capital formation is modest. We do find that environmental regulations affect regions differently. More stringent environmental regulations will improve the relative position of manufacturers in the North-east, South Atlantic and West. Over one-fourth of the dollar losses in manufacturing capacity would occur in five states: Texas, California, Pennsylvania, Ohio and Michigan.     

Can Voluntary Environmental Regulation Work in Developing Countries? Lessons from Case Studies

Hamstrung by weak institutions that undermine conventional environmental regulatory tools, policymakers in developing countries are increasingly turning to voluntary approaches. To date, however, there have appeared few evaluations of these policy experiments. To help fill this gap, we summarize arguments for and against the use of voluntary regulation in developing countries, review the nascent literature on the topic, and present case studies of agreements negotiated between regulators and leather tanners in an industrial city in Mexico, a national environmental audit program in Mexico, and a national public disclosure program in India. Admittedly few in number, these three case studies nevertheless suggest that although voluntary environmental regulation in developing countries is a risky endeavor, it is by no means doomed to failure. The risks can be minimized by emphasizing the dissemination of information about pollution and pollution abatement options and by avoiding voluntary approaches in certain situations—those where regulatory and nonregulatory pressures for improved environmental performance are weak and where polluters can block quantified targets, individual sanctions for noncompliance, and other widely accepted prerequisites of effective voluntary initiatives.     

Free trade in mad cows: how to kill a beef industry

Australia is the world's second largest beef exporter, dominating the highest value beef markets of Japan and Korea. Australia's competitiveness is underpinned primarily by its freedom from Bovine Spongiform Encephalopathy (BSE)—better known as ‘Mad Cow’ disease—thanks to strict animal feeding and importation regulations adopted in 1966. Why then would the Australian beef industry appear to agree to soften prohibitions on beef imports from BSE-affected countries, which would have the effect of opening Australia to BSE and potentially destroying its BSE-free status, along with its prime Asian markets? Our analysis begins with commitments that appear to have been made under the Australia–United States Free Trade Agreement. If our interpretation is correct, these commitments would compel Australia to accommodate US trade goals by recognising and adopting the weaker international standards on meat trade. To understand why the US would want Australia to abandon its stringent BSE safeguards, we consider wider US policy on BSE and beef exports, and its strategy for re-entering the valuable Japanese and Korean markets. To explain why the Australian beef industry might allow its interests to be sacrificed to serve US trade goals, we examine institutional and ownership features of the industry. Government pre-emption or ‘capture’, we suggest, explains industry subservience. The apparent willingness of the Australian government to sideline its country's economic interests in order to serve those of a foreign power raises the question of Australian exceptionalism.     

The locus of financial regulation: home versus host

If the G's are the world's steering committee, the step from G7 to G20 deepened the democratic legitimacy of this committee. However, it also shifted influence to a group that share little else other than economic power: they have diverse experiences, challenges, cultural perspectives and starting points. This is particularly the case in the field of financial regulation, where action across these countries in recent months—despite all the language of global regulation—is increasingly local. The prospect of the new global being quite local has dismayed some. But it need not. This article challenges the dichotomy of more global versus more local. It argues that financial internationalism—greater cooperation by nations for the benefit of all—is better served by institutions that help to integrate diverse systems than those which try to enforce one‐size‐fits‐all approach to very different economies. International banks persuaded regulators of the benefits of home country regulation and a level playing field for bankers. But the benefits accrued largely to the banks in the boom and proved an avenue for contagion during the crash. Host country regulation may prove a safer way to regulate financial systems, in particular by allowing regulation to be more responsive to national economic conditions and cycles. It is likely that a shift back to host country regulation will act as a drag on international capital flows. The instinct of economists is that the cost of this is uncertain, suspect and conditional, especially when compared to the costs of financial crashes. Host country regulation does not mean there is no role for international institutions, such as the newly minted Financial Stability Board. Instead, it suggests a more nuanced role, potentially encompassing the policing of international market infrastructure, financial protectionism, information free flow between regulators and the convergence of regulatory principles and the consolidation of regulatory instruments. An informed and collegiate process of integrating different financial systems will be a more resilient system than one which tries to apply a single rule book across inherently different countries.     

FOREIGN DIRECT INVESTMENT,INSTITUTIONAL CONTEXT AND THE CHANGING POLISH PIG INDUSTRY

The world's meat market has had tremendous growth in the past decades. Global meat producers, particularly in developed economies, have grown bigger through expansion, mergers and acquisitions. The livestock markets in less developed countries are particularly the prime targets for investments by these producers. This article looks at foreign direct investment in a transitional economy, using Poland's pig industry as the empirical case study. It argues that such investments not only bring significant changes in the method of producing meat in the host country; they also have particular socio‐political impacts and have thus been met with some level of resistance by local communities. Our study suggests that the relations of foreign firms to the local community are crucial for their long term presence; and these relations are in turn dependent on a gamut of place specific features and the firms' broader corporate philosophy and strategy. In general, foreign firms need to find ways to replicate the kinds of deep social‐economic links between the livestock industry and places that existed in the socialist era. The case studies of American‐owned Agri Plus and Danish‐owned Poldanor illustrate some of the difficulties involved in the foreign investment in the meat industries while demonstrating the viability and possibility of such companies becoming more accepted and welcomed in the local communities.     

THE POLITICAL TRADE‐OFF BETWEEN ENVIRONMENTAL STRINGENCY AND ECONOMIC DEVELOPMENT IN RURAL AMERICA*

ABSTRACT We examine the impact of the political trade‐off between rural economic development and environmental quality on the determination of environmental regulations in the U.S. intensive livestock industry. The political economy model, adapted from Fredriksson (1997) , is tested empirically, using state‐level data on environmental regulation of the U.S. livestock sector. We find that state governments respond to greater potential for water pollution with more stringent environmental regulations. Consistent with our political economy model, we also find that states with lower recent growth in per capita income implement less stringent environmental regulations.     

LOCATION‐SPECIFIC HUMAN CAPITAL,LOCATION CHOICE AND AMENITY DEMAND*

ABSTRACT The role of amenities in the flow of migrants has long been a subject of debate. This paper advances an original model of amenities that work through household production instead of directly through utility. Area characteristics (amenities) affect household production, causing certain kinds of human capital investments to be rewarded more than others. Area heterogeneity thus makes such investments location‐specific. This specificity—along with a period of exogenous location—increases the opportunity costs of moving, diminishes migration flows between dissimilar locations and increases valuation of amenities that were present in the originating area. These theoretical results emphasize people's sorting across areas and thus differ from the results of the standard model of compensating differentials. Empirical tests of the model's predictions using NLSY79 data show that childhood investments affect migration flows in the way proposed by the model.     

Government Protection of Domestic Communications as National Defense: Assessing Canadian Government Policies

In the nominal interest of promoting a national identity and a stronger federation, a range of public policies have been implemented by the Canadian government to encourage and facilitate cross-subsidization in the Canadian telecommunications and broadcasting industries. The main policy instruments involve government regulations and foreign ownership restrictions that contribute to higher revenues for domestic producers of communication services than would otherwise be realized. The quid pro quo is that domestic telecommunications carriers and broadcasters must undertake costly and unprofitable actions that involve subsidizing activities such as rural telephone services and “Canadian entertainment content.” Unfortunately, there is little evidence that the relevant policies promote the goal of strengthening Canada’s national identity. Furthermore, they are inefficient, as well as nontransparent. The fact that several other countries, particularly France, have lauded Canadian content regulations as a “model” for smaller, open economies, they are more appropriately viewed as the socially undesirable outcome of a muddled public choice dynamic.     

Regulatory regionalism and anti-money-laundering governance in Asia

With the intensification of the Financial Action Task Force's (FATF's) worldwide campaign to promote anti-money-laundering regulation since the late 1990s, all Asian states except North Korea have signed up to its rules and have established a regional institution—the Asia/Pacific Group on Money Laundering—to promote and oversee the implementation of FATF's 40 Recommendations in the region. This article analyses the FATF regime, making two key claims. First, anti-money-laundering governance in Asia reflects a broader shift to regulatory regionalism, particularly in economic matters, in that its implementation and functioning depend upon the rescaling of ostensibly domestic agencies to function within a regional governance regime. Second, although this form of regulatory regionalism is established in order to bypass the perceived constraints of national sovereignty and political will, it nevertheless inevitably becomes entangled within the socio-political conflicts that shape the exercise of state power more broadly. Consequently, understanding the outcomes of regulatory regionalism involves identifying how these conflicts shape how far and in what manner global regulations are adopted and implemented within specific territories. This argument is demonstrated by a case study of Myanmar.     

Between Kant and Machiavelli: EU foreign policy priorities in the 2010s

The entry into force of the Lisbon Treaty invites and enables Europe to develop elements of a common foreign policy. Europe should resist the tendency of listing all issues calling for attention, and be aware that it will have to address three agendas, not just one. The first agenda is the Kantian one of universal causes. While it remains essential to European identity, it presents Europe with limited opportunities for success in the 2010s as could be seen at the 2009 Climate Summit in Copenhagen. The ‘Alliance’ agenda remains essential on the security front and would benefit from a transatlantic effort at rejuvenation on the economic one. Last but not least, the ‘Machiavellian’ agenda reflects what most countries would define as their ‘normal’ foreign policy. It calls for Europe to influence key aspects of the world order in the absence of universal causes or common values. While Europe's ‘Machiavellian’ experience is limited to trade policy, developing a capacity to address this third agenda in a manner that places its common interests first and reinforces its identity will be Europe's central foreign policy challenge in the 2010s. A key part of the Machiavellian agenda presently revolves around relations with Ukraine, Turkey and the Russian Federation, three countries essential to Europe's energy security that are unlikely to change their foreign policy stance faced with EU soft power. Stressing that foreign policy is about ‘us’ and ‘them’, the article looks at what could be a genuine European foreign policy vis‐à‐vis each of these interdependent countries, beginning with energy and a more self‐interested approach to enlargement. The European public space is political in nature, as majority voting and mutual recognition imply that citizens accept ‘foreigners’ as legitimate legislators. At a time when the European integration process has become more hesitant and the political dimension of European integration tends to be derided or assumed away, admitting Turkey or Ukraine as members would change Europe more than it would change these countries. Foreign policy cannot be reduced to making Europe itself the prize of the relationship. What objectives Europe sets for itself in its dealing with Ukraine, Turkey and Russia will test whether it is ready for a fully‐fledged foreign policy or whether the invocation of ‘Europe’ is merely a convenient instrument for entities other than ‘Europe’.     

The politics of repressing environmentalists as agents of foreign influence

Theoretically, this article reveals the long-term risk for local non-governmental organisations (NGOs) of participating in transnational advocacy networks (TANs), accepting money from foreign sources and throwing ‘boomerangs’ internationally—a strategy used by local NGOs to seek international allies to pressure repressive and unresponsive states at home. Focusing primarily on the suppression of environmental NGOs that oppose natural-resource extraction, this article examines three cases—Russia, India and Australia—to illuminate the consequences of this trend for local civil society and TANs. It also documents a global trend towards states depicting local NGOs with international linkages as subversive agents of foreign interests, justifying legal crackdowns and the severing of foreign funding and ties. State framing of NGOs as agents of foreign interests is repressing local environmental activism, depoliticising civil society and weakening international NGO alliances—a conclusion with far-reaching consequences for the future of TANs, local NGOs and environmental activism.     

地缘战略视角下“一带一路”倡议对中国对外直接投资的影响研究

“一带一路”倡议的提出兼具改善地缘环境和拉动对外投资的目的。然而，现有研究较少采取地缘战略视角分析“一带一路”倡议对于中国向“一带一路”沿线国家投资的影响。本文基于中国对外投资数据，通过整合政治地理学和经济地理学的相关研究成果，运用双重差分的面板回归模型考察“一带一路”倡议对中国在“一带一路”沿线国家投资的政策效应。研究发现，“一带一路”倡议提出后中国向中亚和西亚地区的投资比“一带一路”沿线其他国家增长更快，说明地缘战略对中国海外投资有重要影响；此外，中国对“一带一路”沿线国家的投资受中国与东道国经贸联系和东道国市场规模的影响，但是地理邻近性、东道国的制度环境和东道国自然资源等因素的影响不显著。本研究对于加强政治地理和经济地理的结合和制定中国对“一带一路”沿线国家投资政策等有参考意义。     

Trajectories for Greening in China: Theory and Practice

This edited volume argues that China's development poses the greatest ever environmental challenge for the modern world in terms of speed, size and scarcity. The volume is organized around the greening of the Chinese state and society: can the inclusion of sustainable development principles into governance, management and daily practices by social actors lead to sustainable development per se? This introduction sketches the different scholarly camps around greening and sustainable development, ranging from sceptical to radical environmentalism. The contributions demonstrate that China is showing clear signs of greening as new institutions and regulations are created, environmental awareness increases and green technologies are implemented. However, the question remains whether this is sufficient to effectuate long‐term sustainable development. The key factors here are the sheer speed of China's economic growth, the size of its population, and the relative scarcity of its natural and mineral resources. Chinese development presents compelling reasons for rethinking the viability of greening. It is necessary to move beyond both alarmist visions of an environmental doomsday, and optimistic notions that incremental changes in technology, institutions and lifestyles are sufficient for sustainability. It might be more fruitful — and not only for China — to consider ‘precautionary’ rather than ‘absolute’ limits to growth.     

Hong Kong under Chinese Sovereignty: Economic Relations with Mainland China, 1978-2007

A Hong Kong—based economic geographer presents an array of statistical data through 2007 that place Hong Kong among the world's leading financial, foreign trade, and air cargo handling centers. The paper's main focus is the economic relationship with Mainland China, which has grown and expanded since the change of the city's sovereignty in 1997. Included in the presentation is a review of economic integration before and after the handover by the UK to China, the pattern of cross-border investments and foreign trade, the growth of the logistics and tourism industries, and the challenges posed by changing economic relations, partly due to the rapid development of Hong Kong's hinterland. Journal of Economic Literature, Classification Numbers: O16, O18, O20, R11. 2 figures, 5 tables, 64 references.     

Unpacking Land Grabs: Subjects,Performances and the State in Ghana's ‘Small‐scale’ Gold Mining Sector

During the 2008 global financial crisis, gold‐backed reserves became a ‘safe haven’ for capital investment, causing gold prices to hit historic highs. Globally, small‐scale gold mining activities proliferated as prices climbed. Along the banks of Ghana's Offin River, abandoned, waterlogged mining pits now stretch for kilometres where agricultural and other land uses recently existed. While small‐scale mining is a right reserved for Ghanaian citizens, many mining sites are foreign‐operated and almost all go unremediated. There is thus a stark tension between Ghanaian minerals laws and environmental regulations and the ongoing transformation of rural landscapes. Based on 112 interviews and long‐term observation in Ghana since 2010, this article untangles the relationships and practices mediating ‘illegal’ foreign mining operations. Shifting subjectivities, performances and practices bring land grabbing into being as state actors weave together legal and extra‐legal domains to facilitate, and profit from, foreign mining. Other officials experience fear and frustration in the face of powerful mining interests, demonstrating the complex workings and conflicts between government actors and agencies. Detailing co‐productions between ‘legal’ and ‘illegal’ domains in official licensing procedures complicates understandings of the state and its role in foreign land grabbing, breaking down the ontological binaries — rational/irrational, official/unofficial — used to uphold an image of state legitimacy and cohesion. Finally, given the spatial extent of small‐scale mining deals and ensuing social and environmental transformations, the authors urge land‐grab scholars not to dismiss the importance of small‐scale deals alongside larger transactions.     

Squeezed between external trade barriers and internal economic problems: Bulgaria’s trade with Denmark in the 1970s

ABSTRACT

This paper investigates Bulgaria’s trade strategy towards the European Economic Community (EEC) in the 1970s: a decade of intensified economic exchange between East and West thanks to détente and, simultaneously, of growing trade barriers due to the consolidation of the EEC’s Common Market. The successes and failures of Bulgaria’s endeavours are discussed through a study of economic cooperation with Denmark before and after its accession to the EEC in 1973. The main argument is that while Bulgarian economic policy focused on the rising regulatory impediments to trade with EEC members, it neglected the structural deficiencies of Bulgarian export production. Thereby, Bulgarian state officials strove to resolve foreign trade problems through diplomatic negotiations over customs regulations instead of advancing domestic economic reforms . This argument is supported by analysis of intergovernmental economic negotiations and trade deals between Bulgaria and Denmark during the 1970s. It highlights the different ways in which Bulgarian trade envoys in Copenhagen and top officials at home evaluated recurrent problems in accessing the Danish market and formulated solutions for these problems. Thus, instead of tackling internal structural problems, the blueprints for Bulgaria’s foreign trade focused on external foes, namely trade discrimination against socialist countries.     

Monitoring costs and the mode of international investment

Our central proposition is that monitoring costs increase withphysical distance, and hence, direct investments located furtherfrom the foreign investor's home base should be more likelyformed as joint ventures. Tests on a data set of Taiwanese directinvestments in Mainland China provide robust support to thehypothesis. A project that was located 1000 kilometers furtheraway was 13–17% more likely to be formed as a joint venture.     

Environmental Standards and Industrial Restructuring: the Case of the Australian Paper Industry

Environmental standards imposed on the Australian paper industry have emerged in response to public concern over the logging of native forests and the ‘greening’ of consumer demand. Such standards play an integral part in the paper industry's restructuring. Neo-classical theorists hypothesised environmental standards as encouraging the relocation of polluting industries to countries with lax regulations. An alternative hypothesis is that environmental standards encourage in-situ restructuring that can positively affect a company's competitiveness. In considering this alternative hypothesis the implications for state and federal policy are briefly considered.     

Economic statecraft in China's new overseas special economic zones: soft power,business or resource security?

China's rapidly growing economic engagement with other developing countries has aroused intense debates, but these debates have often generated more heat than light. The Chinese government is clearly pushing its companies to move offshore in greater numbers, and state‐owned firms figure prominently in many of the major investments abroad. Yet relatively little research exists on when, how and why the Chinese government intervenes in the overseas economic activities of its firms. China's state‐sponsored economic diplomacy in other developing countries could play three major strategic roles: strengthening resource security, enhancing political relationships and soft power, and boosting commercial opportunities for national firms. This article examines China's programme to establish overseas special economic zones as one tool of Beijing's economic statecraft. It traces the process by which they were established and implemented, and investigates the characteristics of the 19 zones initially selected in a competitive tender process. The article concludes that even in countries rich in natural resources, the overseas zones were overwhelmingly positioned as commercial projects. Particularly in the Asian zones, China is following in the footsteps of Japan. The zone programme, and the Chinese foreign investment it hoped to foster, represents a clear case of the international projection of China's developmental state. However, in Africa (but not generally elsewhere) discourse surrounding the zones publicly positions them as a transfer of China's own development success, thus potentially enhancing China's political relationships and soft power on the continent.     

How Do Different Types of Local Governments' Sustainability Programs Relate to Their Environmental Outcomes

Local governments worldwide have developed a suite of sustainability programs to improve environmental conditions within their jurisdictions. However, critics suggest that local governments' sustainability programs are more symbolic than substantial in that they are often developed to create the appearance of addressing environmental issues rather than actual environmental performance outcomes. Despite the skeptics, as yet, we have little empirical understanding of the environmental impact of local sustainability programs. This paper bridges the gap by considering how the design of 102 county governments' individual sustainability programs relates to improvement of their ozone quality between 2003 and 2013. After controlling for the spatial dependence of ozone quality among neighboring counties, this paper offers the evidence that local sustainability programs are related to improved environmental conditions. Moreover, the sustainability programs that are designed more comprehensively across environmental issues appear to have greater policy efficacy compared to those focusing on a few environmental issues. These findings provide optimistic views about the local, non-regulatory policy effort for improving collective environmental quality. This implication is particularly salient given the lack of strong national and international environmental regulatory regimes.