fficials often argue that their nations' comparative advantage lies in their cheaper labor or lower regulatory standards. These officials may perceive that placing additional conditions upon foreign investors may ultimately make their nations less attractive to global investors.
             But globalization may not always undermine developing country efforts to strengthen human rights, promote human rights, and protect the environment. Public concern about the activities of global corporations may prod business executives to move production to those nations that are democratic, well governed and can effectively regulate environmental and social conditions. This in turn may encourage more nations to make their systems of governance more effective. Here's why. Executives of many firms, under pressure to reduce costs, may be tempted to shift their operations to nations with lower social, environmental, and transparency rules or nations with weak enforcement of such rules. Yet these same executives are also under constant pressure to maintain the reputations of their firms, lest their market share and valuation suffer. Firms that mistreat their employees or practice environmental or social dumping have been punished by consumers and investors, as Nike and Shell executives, among others, can attest. Thus, these executives will search the world for locations that combine relatively lower wages with good governance.
             Most analysts would characterize "good governance" as a transparent and relatively uncorrupt judiciary, legislature, and executive branch; fiscal discipline (including limited subsidies); privatization of key sectors such as telephony, airlines etc...; and protection of property rights. However, it also includes a commitment to invest tax dollars in public goods such as education, public health as well as a transparent system of regulation. Countries that invest in good governance are developing the physical, political, and econ...