Sustainability Regulations: Bridging High and Middle-Income Countries

A new study published in Nature Communications delves into the complex interplay between international trade, global production networks, and sustainability regulations, shedding light on public preferences and policy implications across middle-income countries.

Global production practices have spurred economic development worldwide but have also brought about significant environmental and social costs, particularly in middle-income countries. These nations, with Gross National Income (GNI) per capita ranging from $1,136 to $13,845, bear the brunt of pollution and labor-intensive production, driven by trade liberalization and globalized supply chains.

High-income countries, with GNI per capita exceeding $13,845, are now seeking to address the negative impacts of their domestic consumption by imposing new sustainability regulations on global supply chains. These regulations, aimed at mitigating environmental and social risks, have garnered broad support in high-income countries.

The study aims to explore whether citizens in middle-income countries support aligning domestic sustainability regulations with those developed by high-income countries. There are concerns about economic competitiveness and foreign imposition, but desires for market access and strengthening local regulations could foster support for alignment.

Survey-embedded experiments conducted in Brazil, India, and Indonesia reveal surprisingly strong support for domestic-based measures aligned with emerging global supply chain sustainability regulations. This support is largely driven by positive impact expectations, where the benefits of alignment outweigh concerns about increased costs.

These findings suggest a shift in global attitudes towards stricter sustainability regulations for global supply chains, with potential implications for global governance and trade dynamics. The alignment of public preferences across high- and middle-income countries could pave the way for coordinated policy action to address environmental and social challenges associated with global production networks.

The study offers recommendations for policymakers, emphasizing the importance of balancing regulatory stringency with the value of disclosed information and addressing inequities in stakeholders' capabilities to comply with new rules. Further research is needed to explore the distributional impacts of sustainability policies and understand the disconnects between public preferences and elite interests in governance structures.

In conclusion, the study highlights the potential for collaboration between high- and middle-income countries to address sustainability challenges in global supply chains, signaling a promising step towards a more equitable and sustainable global economy.