Democratization entails the political incorporation of pollution victims whose subsistence rights have been sacrificed in the single-minded pursuit of economic growth. Newly democratized regimes have instituted mechanisms of environmental governance with varying degrees of success. This paper analyzes the process in which pollution disputes are channeled through legal procedures, by looking at Taiwan's Public Nuisance Disputes Mediation Act (PNDM). This system was enacted in 1992 to reduce the disruptiveness and politicization of protests after the failure of preemption and repression strategies. Contrary to the official claims, I find the PNDM produced limited absorption because its restrictive design was unfavorable to pollution victims. The institutional failure led to the widespread implementation of good-neighbor policies by business. With this undemocratic system of material payoffs to affected communities, business succeeded in reducing protest potentials by co-opting community leadership.
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