environmental standards. Part of the reason for this decision is that designing an industrial plant is a complex

and costly task, and so if a plant works well in a high-income country, companies prefer to use the same design

everywhere. Also, companies realize that if they create an environmental disaster in a low-income country, it is

likely to cost them a substantial amount of money in paying for damages, lost trust, and reduced sales—by

building up-to-date plants everywhere they minimize such risks. As a result of these factors, foreign-owned

plants in low-income countries often have a better record of compliance with environmental laws than do

locally-owned plants.

Pressuring Low-Income Countries for Higher Environmental Standards

In some cases, the issue is not so much whether globalization will pressure low-income countries to reduce

their environmental standards, but instead whether the threat of blocking international trade can pressure
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