Globalisation and Poverty: How can Global Value Chain Research Inform the Policy Debate?

By Khalid Nadvi. 2004

119 citations recorded by the source corpus.

Globalisation and its relationship to poverty reduction is a subject of intense debate among academics, policy actors and street protestors. Globalisation can be understood as the lowering of transaction costs associated with the international movement of goods, capital, information, culture and (to a lesser extent) labour. A central plank of economic globalisation has been trade liberalisation. This has facilitated complex patterns of global production of goods and services and transformed local markets into global trading arenas. Those who argue that such processes work to reduce poverty state that trade liberalisation and foreign investment enhance efficiency, lower costs, provide access to know-how, and promote growth, thereby raising incomes for the poor (Dollar and Kraay 2000). Thus, a recent World Bank report argued that countries that reduced trade barriers and integrated effectively into the global trading economy also experienced substantial improvements in exports and economic growth (World Bank 2002: 32–39). Among the “globaphiles” dominating the Bretton Woods institutions, making markets work more efficiently through macroeconomic, trade and regulatory reforms is seen as the key policy instrument for fast-track economic growth. The success of many East Asian economies are often cited as examples of the potential gains of adopting such economic strategies (World Bank 1993). While the economic logic of the “marketoriented” globaphiles can be strong, the evidence on the ground, according to many critics, is less persuasive. Strong arguments are put forward by those more sceptical of the inherent benefits of globalisation, that globalisation has resulted in sharply disparate gains across countries (Milanovic 2003). The share of global trade accounted for by the least developed countries fell from 0.8 per cent in 1980 to 0.4 per cent by 2000. Moreover, while the East Asia region, and especially China, has been successful in engaging through trade in the global economy, much of sub-Saharan Africa has been left out. In addition, many of the Asian success stories were either displaying significant levels of growth prior to engaging in a reform process, or maintained considerable protective trade barriers while expanding their exports (Rodrik 2001). Discussions on the link between globalisation and poverty have largely concentrated on the macro evidence, drawing on country comparative data. There have been, at best, only limited attempts to bring meso (sectoral) and micro (firm, workers and household) level evidence to the debate. This article seeks to address that gap. It draws on findings from various studies undertaken by a project that examined the link between globalised production systems and local employment and poverty impacts. This focused on the export-oriented horticulture, garments and textiles industries in two Asian (Bangladesh and Vietnam) and two African (Kenya and South Africa) countries. The studies use a common conceptual framework in global value chain (GVC) analysis. A key feature of globalisation is the increasingly complex networks of global suppliers who produce in dispersed locations to the exacting demands of global lead firms. The GVC model focuses on the nature of relationships within such networks. The GVC framework provides a handle on assessing the power of lead firms in structuring the chain, and IDS Bulletin 35.1 Globalisation and Poverty

Subfields: Business and International Management, Plant Science, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/736baf36c8cb45d2f5f21f3882ae093a6ea4788c

How researchers see this paper

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In Business and International Management

1. H. Schmitz
2. F. Palpacuer
3. P. Knorringa
4. L. Pegler
5. Doris Fuchs
6. A. Kalfagianni
7. Gary Gereffi
8. Neil M. Coe

In Plant Science

1. F. Palpacuer
2. L. Pegler
3. H. Schmitz
4. Doris Fuchs
5. P. Knorringa
6. A. Kalfagianni

In Strategy and Management

1. F. Palpacuer
2. H. Schmitz
3. P. Knorringa
4. L. Pegler
5. Doris Fuchs
6. A. Kalfagianni
7. Gary Gereffi
8. Neil M. Coe

Citations in the corpus

• Value chain analysis for policy-makers and practitioners (2005, background): “Nadvi (2004b) shows that – in spite of inequalities along the chain – the job and earning opportunities for workers, especially for young women, have improved enormously over time.”
• From the Firm to the Network: Global Value Chains and Employment Relations Theory (2013, unknown): “…in a wide variety of studies, including but certainly not limited to studies which employ GVC analysis, in order to understand different employment relations patterns (e.g. Storper and Salais 1997; Katz and Darbishire 2000; Dolan and Sutherland 2003; Barrientos and Kritzinger 2004; Nadvi 2004).”
• GLOBALISATION, FIRM UPGRADING AND IMPACTS ON LABOUR (2006, background): “From a development perspective this at least initially leads to an important pro-poor economic stimulus as it generates new and relatively better-paid employment in a specific locality ( Nadvi 2004 ).”
• The Causes and Consequences of Private Food Governance (2010, background): “In New Zealand, a Green Party survey revealed that supermarkets are 61 Henson and Reardon 2004; Nadvi 2004.”
• Agricultural Value Chains in Developing Countries A Framework for Analysis (2011, unknown): “This was very well illustrated by Nadvi (2004) in a study on a boom in the vegetables and fruit sector of several East African countries, that, however, did not lead to an equal increase in production of high value added products nor a decrease of poverty: “In Kenya , exports of fresh vegetables…”
• Bringing the social context back in: governance and wealth distribution in global commodity chains (2008, background): “Some GVC studies documented improvements in work conditions as compared to local employment alternatives, but these were typically restricted to ‘greenfield’ locations in poor areas made attractive by buyers and producers’ logic of continuously searching for lower labour costs (Nadvi, 2004).”