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Chapter 21: Q.11 (page 522)

Explain the logic behind the “race to the bottom” argument and the likely reason it has not occurred.

Short Answer

Expert verified

Because of the argument of “race to the bottom” countries can compete for jobs.

Step by step solution

01

Step 1. Meaning 

Race to the bottom- when the location of production is with the lowest environmental standards, it puts pressure on all other countries to lower their environmental standard.

02

Step 2. Explanation 

By lowering their environmental standard, low-income countries can compete for jobs and attracts businesses to the country.

The comparative reduction in environmental standards causes much harm to the environment, for business, pollution management would be the cost which is not much relative to the cost of good infrastructure & labor, it will not beneficial for firms to produce miles away from consumers.

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