What is "race to the bottom"

n. 1 (context lang=en economics) A situation in which competition between governments leads to very excessive (harmful) deregulation. 2 A situation in which competition between entities leads to elimination of perks or amenities, often in the interest of cutting costs.

The race to the bottom is a socio-economic phrase which is used to describe government deregulation of the business environment or taxes in order to attract or retain economic activity in their jurisdictions. An outcome of globalization and free trade, the phenomenon may occur when competition increases between geographic areas over a particular sector of trade and production.