Linking Up to Development? Global Value Chains and the Making of a Post‐Washington Consensus

Abstract

Over the last decade, the global value chain (GVC) approach, with its associated notions of chain governance and firm upgrading, has proliferated as a mode of analysis and of intervention amongst development institutions. This article examines the adoption and adaptation of GVCs at four multilateral agencies in order to understand the purchase of value chain approaches within the development field. Mixing GVC perspectives with other theoretical influences and applied practices, these institutions deploy value chain frameworks to signal a new generation of policies that promise both to consolidate, and to advance beyond, the market fundamentalism of the Washington Consensus. To achieve this, value chain development frameworks craft interventions directed toward various constellations of firm and non-firm actors as a 'third way' between state-minimalist and state-coordinated approaches. The authors identify key adaptations of the GVC framework including an emphasis on value chain governance as an instrument to correct market failure in partnership with state and development agencies, and upgrading as a de facto tool for poverty reduction. They find that efforts are ongoing to construct a 'post' to the Washington Consensus and that the global value chain is enabling this process by providing a new language and new object of development intervention: 'the chain' and the local-global linkages that comprise it.

Sustaining Upgrading in Agricultural Value Chains? State-Led Value Chain Interventions and Emerging Bifurcation of the South Indian Smallholder Tea Sector

“…The incentives for lead firms to facilitate upgrading of suppliers beyond process and product upgrading (e.g., functional upgrading) require that the lead firms governing the chain "are willing to relinquish" lower value-added functions up-and/or downstream of the chain [8] (p. 1024), which-due to the companies' competitive strategies-is often not the case. Further, as pointed out by Gereffi (2014) [2] and Werner et al (2014) [1], lead firms might reproduce entry barriers in order to defend their position in the chain, and the extent to which state and development agencies can facilitate programmes to engage smallholder or firm upgrading seems to be more successful if lead firms are facing supply shortages [2] or perceive it as a means to access "large, emerging markets in supplier countries" [1] (p. 1241).…”

“…Since the early 2000s, the Global Value Chain (GVC) approach has proliferated as a novel methodological device for analysing economic globalization and international trade [1][2][3][4]. GVC studies focus on the emergence of new global production systems in which economic integration goes beyond international trade in raw materials and final products to include the internationally dispersed but centrally coordinated production of given commodities or manufactured products by "chains" of independent economic actors [5].…”

“…The chain metaphor and strategies for gaining access to and upgrade within GVC have been echoed and adopted by almost all major multilateral donor agencies during the last decade (for a comprehensive review of strategy papers published by international development agencies with a value chain focus, see [1,2,12]). Value chain intervention strategies have also proliferated amongst state agencies as part of a new (post-Washington Consensus) generation of policies addressing the role of the state in mediating development strategies [12].…”

“…Once entry is gained by producers in developing countries, learning effects take place within GVCs arising from firm-to-firm relationships. The prevailing narrative stresses competition and the free market as desirable for the welfare of producers in the Global South, and lead firms or groups of actors downstream in the chain are mitigating information asymmetry through the dynamics of inter-firm/farm coordination, while the state appears as a "market-facilitating" institution [1] (p. 1240).…”

Beyond facilitator? State roles in global value chains and global production networks

“…A facilitator role has arguably been the main emphasis of broad economic development and trade policy recommendations in relation to GVCs by such international organisations as the World Bank (Cattaneo, Gereffi, Miroudot, & Taglioni, ), World Trade Organization (WTO) (Elms & Low, ), World Economic Forum (), and United Nations Conference on Trade and Development (World Investment Report, ). Some initial research suggesting the deployment of the value chain framework in practice has been as part of a focus on a “business‐enabling environment” (Neilson, , 45) within a post‐Washington Consensus context of “making markets work” (Werner, Bair, & Fernández, ) policies that are facilitative towards firms in GVCs. Yet the contemporary era of a recent surge of neonationalism and speculation of whether some retreat from globalisation is emerging as a result of renewed efforts at protectionism amplifies the reality that a range of state roles may contemporaneously be adopted in GVCs and GPNs.…”