Policy interactions at a multiscale geographical space for developing the green economy: Evidence from the international diffusion of environmental goods

Abstract

The institutional and multi-scale perspective provide a promising nexus between economic geography and environmental governance. They help to overcome the duality of the global–local nexus for regions in a globalising world, enabling the rediscovery of the role of states and their governance. This article proposes that the scalar structure of institutional linkages is not continuous from the global to the local, where the state level is a discontinuity. The supra-national interdependence is horizontal and the sub-national governance is hierarchical. They interact with each other to affect the path development of new economies. International trade in environmental goods during 2001–19 is used as an empirical case. The results show that the liberalising trade policies (international interdependencies) open a window of opportunity for countries to develop a green economy, while domestic industrial and environmental policies (domestic governance) help to anchor the opportunities by enhancing the effect of trade policies. These results show that an enabling system of environmental governance requires a multi-scalar structure that includes states. Domestic governance allows the states to adapt to the global governance regime, and then seize the development opportunities offered by international interdependencies. The states play a crucial role in balancing the multi-scale interactions in the global governance regime. This is different from what the conventional global–local nexus might conclude.