Unbundling the Pollution Haven Hypothesis
The “Pollution Haven Hypothesis” (PHH) is one of the most contentious and hotly debated predictions in all of international economics. This paper explains the theory behind the PHH by dividing the hypothesis into a series of logical steps linking assumptions on exogenous country characteristics to predictions on trade flows and pollution levels. I then discuss recent theoretical and empirical contributions investigating the PHH to show that each contribution either questions the logical inevitability or the empirical significance of one or more steps in the pollution haven chain of logic. Suggestions for future research are also provided.
M. Scott Taylor. "Unbundling the Pollution Haven Hypothesis" The B.E. Journal of Economic Analysis & Policy 4.2 (2005).
Available at: http://works.bepress.com/taylor/4