The Environmental Race to the Bottom, Revisited

ABSTRACT This study revisits the environmental race to the bottom thesis in the United States, which argues that states compete for mobile capital by relaxing environmental regulations. Examining state‐level enforcement of federal surface mining and air pollution control regulation over a 35‐year period, we find robust evidence of strategic interaction in state environmental regulatory behavior in the asymmetric manner suggested by the race to the bottom theory. For surface mining regulation, our results also indicate that these dynamics are amplified during Republican presidencies. These findings suggest the continued need to evaluate the efficacy of environmental federalism as it is practiced in the United States, as well as in the many other nations around the world that rely on a similar regulatory model. Race to the bottom dynamics may depress enforcement of environmental protection laws in these contexts, potentially leading to adverse consequences for human health and the environment.