policymakers like Dam, who had responsibilities in the Nixon and the Reagan admin-

istrations, assuming they are more aware of the harmful effects of lobbying than their

liberal counterparts? Even so, all politicians, including conservatives, are subject to

lobbying since they rely on interest groups to finance election campaigns. ‘‘Statecraft’’

thus seems like a nice idea, but turns out to be wishful thinking.

To sum up, Kenneth Dam’s book provides an interesting view on how US economic

policymaking is shaped by lobbies, while the essays edited by Vosgerau elegantly analyze

the challenges of globalization with an European focus. But both books almost never

mention developing nations, and this may be their weakness.

Raphael Franck

ESSEC Business School, Doctoral Program,

Avenue Bernard Hirsch, B.P. 105,

95021 Cergy-Pontoise Cedex, France

E-mail address: franck@essec.fr

PII: S0176 -2680 (02 )00077 -0

International Environmental Economics: A Survey of the Issues

Edited by Gunter G. Schulze and Heinrich W. Ursprung (Oxford University Press, New

York, 2001)

The claim that the liberal world economic order is deleterious to a sustainable quality

of the environment has been recently increasingly heard. Moreover, the ‘‘use or abuse’’

of environmental regulations to achieve competitive advantage in international markets

(i.e. ‘‘ecodumping’’) is becoming an issue attracting increasing concern. In this excellent

and thorough survey, Schulze and Ursprung take a critical global economy view to

analyzing environmental problems and policies and attempt to deal with these and other

issues. They allow the reader to assess the various claims made in the political debate

by systematically confronting claims and models with the hard empirical data and

evidence.

The issues surveyed and analyzed in this volume are not of a ‘‘mere academic

interest.’’ Actually, much of the debate concerning the trade–environment interface

has recently become highly politicized and ideological and passionate in nature. This

is probably the reason we keep hearing various claims which were not subjected to

hard empirical examination. In this context, Schulze and Ursprung’s analytical and

critical approach may even have some impact on the ideologically convinced Seattle

fighters.

The division of the world into sovereign nation states results in serious environ-

mental problems due to the frictions created by national interests at the global level.

We lack a coordinating super-national hand to resolve global environmental prob-

lems. Independent national environmental policy is clearly suboptimal since it

disregards international consequences. Naturally, this problem of frictional interests

exists even at a much lower level, when counties, cities, localities or individuals act

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through their private interests against some broader or national ones (e.g., the

NIMBY effect).

All the contributions collected in this volume are concerned with environmental

problems arising from political failure at the international level. Following an

introductory chapter, Chapter 2 systematically surveys the theory of the trade–en-

vironment interface and its implications, addressing also questions like the possibility

of ‘‘strategic environmental policy,’’ while Chapter 3 confronts Chapter 2’s theories

with the empirical evidence. In Chapter 4, the political economy approach to

analyzing environmental and trade policy formation in an international context is

presented. The next three chapters focus on three specific sectors’ interface with trade

and economic integration: agriculture by David Erwin, deforestation by Edward

Barbier and hazardous waste by Michael Rauscher, respectively. Sjak Smulders

studies the interaction of trade and environmental policies in a second best world by

questioning the possibility of an environmental tax double dividend in an international

context. Lucas Bretschger and Hannes Egli study environmentally sustainable growth

paths in Chapter 9.

In the last two chapters, Carsten Schmidt (Chapter 10) and Roger Congleton (Chapter

11) deal with international environmental agreements, focusing on the political and

economic conditions needed for the applicability and stability of voluntary multilateral

environmental agreements.

Although some analyses suffer from conceptual difficulties and insufficient data

quality and availability, the authors still overcome these barriers and reach some

interesting results. They show that environmental policies hardly affect the pattern of

international trade flows, but that trade regimes do have a strong influence on environ-

mental quality. The literature points out that the relationship between pollution intensity

and the stage of development seems to behave as an inverted U-shape. Trade

liberalization gives rise to a reduction of pollution in developing countries, but may

increase pollution in middle income and industrialized countries. There does not exist

any available empirical evidence sufficient for clearly supporting the ‘‘pollution haven

hypothesis.’’ The authors argue that the benefits of this relocation are too low to justify

it. When surveying the empirical literature, one can find that most of the industrialized

countries’ international direct investments in dirty industries have gone to other

industrialized countries with similar environmental standards. They point to heavily

polluting manufacturing as a possible exception to this rule. The survey also suggests

that economic integration or globalization can have either positive or negative impacts

on the environment. Moreover, the idea that growth, free trade and better environ-

mental quality can be complements is intertwined throughout the book. Globalization

can be characterized by positive spillovers between the respective countries (prosper-

thy-neighbor policies) and, thus, does not necessarily hurt other countries (beggar-thy-

neighbor policies).

Deregulation and privatization of the electricity sector in England and Wales in the

1990s is a good example of the positive spillovers economic liberalization can have.

These positive environmental spillovers include switching from expensive coal to

cheaper and much cleaner natural gas for generating electricity, which contributes to

a substantial drop in emissions of sulfur dioxide (SO2) and nitrogen oxides (NOx), both

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sources of acid rain, and of carbon dioxide (CO2), which is the cause of global

warming. In addition, growing international electricity trade (e.g., US–Canada, inter-

Scandinavia trade and inter-European trade) can be tremendously beneficial for the

environment due to its decreasing impact on the need of each state (or regime) to build

additional polluting electric capacity.

These results call for the critics of economic integration to rethink their traditional

positions. The authors also convincingly argue that only by understanding the political–

economic forces underlying the political process can one ever be in a position to design

laws and institutions that will promote the public interest.

To sum up, this invaluable ‘‘stockpile of knowledge’’ is highly recommended for any

scholar or student of economics, political science and environmental studies who wishes to

become familiar with the main issues and the literature of International Environmental

Economics.

Eli Goldstein

Department of Economics,

Bar Ilan University,

52900 Ramat-Gan, Israel

E-mail address: goldste@popeye.cc.biu.ac.il

PII: S0176 -2680 (02 )00097 -6

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