Pollution Havens and Industrial Flight: Weighing the Evidence

Abstract

There is increasing interest among environmentalists, academicians, and also the business community about the so-called “industrial flight” phenomenon. The concern boils down to whether strict regulations in the advanced industrialized countries compel industries to move their operations to countries with less-exacting environmental rules and regulations. By and large, the latter countries are poor. It is suggested that these poor countries are becoming “pollution havens” for dirty industries. Here, I attempt to draw a distinction between industrial flight and pollution havens. Briefly, one can exist without the other.