Understanding regional value chains through the interaction of public and private governance: Insights from Southern Africa’s apparel sector

Abstract

Regional value chains (RVCs) and South–South trade are increasingly considered key features of 21st-century globalisation. This article investigates how RVCs are shaped by the interaction of private and public governance. It evaluates how this interaction unfolded in Southern Africa’s apparel RVCs, exploring trade, investment and labour regimes across three levels of analysis: national, regional, and global. The paper draws on trade data, secondary literature, and interviews with suppliers and institutions in Eswatini and Lesotho (the largest exporters to the region), and lead firms in South Africa (the largest regional importer). The findings underline the critical role of public governance in shaping retailers’ and suppliers’ participation in RVCs through: (i) regional ‘trade regimes’ protecting regional exporters from global competitors, and recent shifts in global trade regimes; (ii) national and regional ‘investment regimes’ facilitating investment flows from South Africa to Lesotho and Eswatini, and the more recent shift of US-oriented suppliers towards regional markets; and (iii) ‘labour regimes’, including lower wages, less comprehensive labour legislation and weaker trade unions in Lesotho and Eswatini compared to South Africa. The article concludes by considering the policy implications of the interaction of private and public governance for existing and future RVCs in Sub-Saharan Africa.

Governance of Eswatini Apparel Regional Value Chains and the Implications of Covid-19

“…Having recognised that civil society campaigns in developed countries played a critical role in pushing lead retailers to impose corporate codes of conduct on their suppliers (Barrientos and Smith 2007 ; Lund-Thomsen and Lindgreen 2014 ), research on social upgrading sought to understand how public and social governance in the localities where suppliers are based contributed to improved wages and working conditions. Generally, the results have indicated only a limited impact on labour conditions by private governance mechanisms combined with public and social governance: weak labour market institutions in developing countries and the reliance on foreign investments have forced governments to seek compromises, with private governance not able on its own to make a significant impact (Amengual 2010 ; Locke 2013 ; Phillips 2013 ; Mayer and Phillips 2017 ).…”

Making sense of global value chain-oriented policies: The trifecta of tasks, linkages, and firms

“…Several papers included in this special collection show that national and supranational policies play a key role in fostering social and environmental upgrading. Pasquali, Godfrey & Nadvi ( 2021 ) offer empirical evidence from Southern Africa’s regional value chain in apparel that illustrates how difficult it could be improving labor standards when the national and regional contexts are characterized by weak labor legislation and fragile trade unions. In sharp contrast to AGOA and EBA, which respectively regulate trade between the USA and EU and African countries, and incorporate labor standards into trade preferences, neither SACU nor SADC, which regulate trade among African countries, integrate minimum labor standards.…”

Africa Fashion Futures: Creative economies, global networks and local development

“…The need to examine lead firms in Africa within GVC and GPN analysis has been raised (Krishnan, 2018;Oqubay, 2016) and a case made for reconceptualising elements of GVC and GPN, including lead firms, on account of multi-layered public and private governance regimes and simultaneous multiple roles (lead and supplier) for firms serving local, regional and global consumer markets (Horner & Nadvi, 2018). Pasquali et al (2020) and Goger et al (2014) offer scope for considering lead firms from below in value chain analysis of South-South exchanges, which are outstripping North-South exchanges especially in the apparel subsector. What is also distinctive about this regional pivot is the attention to smaller batches as well as a higher fashion content and greater complexity and intermediating between smaller assembly operations (Goger et al, 2014;Pasquali et al, 2020).…”

“…Pasquali et al (2020) and Goger et al (2014) offer scope for considering lead firms from below in value chain analysis of South-South exchanges, which are outstripping North-South exchanges especially in the apparel subsector. What is also distinctive about this regional pivot is the attention to smaller batches as well as a higher fashion content and greater complexity and intermediating between smaller assembly operations (Goger et al, 2014;Pasquali et al, 2020). This shows the scope for creativity, innovation, sustainability and associated value retention on design and brand by designers within this context.…”

“…Pasquali et al. (2020) and Goger et al. (2014) offer scope for considering lead firms from below in value chain analysis of South‐South exchanges, which are outstripping North‐South exchanges especially in the apparel subsector.…”