Competition and Cooperation in Environmental Policy: Individual and Interaction Effects

The theory of regulatory competition suggests a race to the bottom of environmental standards. This theory, however, has not found much empirical support. Several attempts to account for this theoretical failure have been made in the literature, which mainly refer to the underlying assumptions of the theory. In this article, we present an alternative explanation. We argue that in reality regulatory competition is overlapped by other mechanisms affecting the adjustment of national policies. Most important are the effects emerging from regulatory cooperation at the level of the European Union (EU). To arrive at more precise theoretical predictions, we therefore not only analyze the individual effects of competition and cooperation on national policies, but also the impact of their interaction.