Poor countries suffer from serious environmental damage, and much more pollution control is justifiable. Weak regulation is partly to blame, but the evidence suggests that it reflects a general development problem, not deliberate creation of “pollution havens” to promote investment and trade. Aid from the OECD countries can help reduce pollution in poor countries by promoting better public information about polluters, stronger regulatory institutions, and more explicit attention to environmental risks in large projects. However, attempts to enforce OECD-level regulatory standards through general trade and aid sanctions are both regressive and useless: regressive because they penalize workers in poor countries by reducing opportunities for jobs and higher wages; useless because governments of low-income countries can not deliver on promises of OECD-level regulation, even if they wish to do so.

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