It has recently been proposed that gravity-localized compactifications can
generate the required gauge hierarchy without the need for hierarchically l
arge extra space-time dimensions. In this paper, we show that gauge couplin
g unification arises naturally in such scenarios as a result of the anomaly
induced by the rescaling of the wavefunctions of the brane fields. Thus, "
anomaly-induced" gauge coupling unification can easily explain the apparent
low-energy gauge couplings in gravity-localized compactifications. However
, we also point out a number of phenomenological difficulties with such com
pactifications, including an inability to accommodate the GUT scale and the
electroweak scale simultaneously. We also show that brane/bulk couplings i
n this scenario are generically too small to be phenomenologically relevant
. Finally, we speculate on possible resolutions to these puzzles. (C) 2000
Elsevier Science B.V. All rights reserved.