Understanding regional value chains through the interaction of public and private governance: Insights from Southern Afr
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Understanding regional value chains through the interaction of public and private governance: Insights from Southern Africa’s apparel sector Giovanni Pasquali1,3, Shane Godfrey2 and Khalid Nadvi1 1
The Global Development Institute, University of Manchester, Manchester, UK; 2 Development and Governance Research Unit, University of Cape Town, Cape Town, South Africa; 3 The University of Manchester, Arthur Lewis Building, Room 2.037, Oxford Road, Manchester M13 9PL, UK Correspondence: G Pasquali, The University of Manchester, Arthur Lewis Building, Room 2.037, Oxford Road, Manchester M13 9PL, UK e-mail: [email protected]
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. Journal of International Business Policy (2020). https://doi.org/10.1057/s42214-020-00071-9 Keywords: regional value chains; global value chains; South–South trade; public governance; South Africa; Lesotho; Eswatini; apparel
The online version of this article is available Open Access
Received: 31 August 2019 Revised: 6 August 2020 Accepted: 21 August 2020
INTRODUCTION Recent studies show that South–South trade now exceeds North– South trade, and that intra-regional commerce accounts for a large share of the global South’s improved trade performance (Horner & Nadvi, 2018). This is leading to a growing interest in the role of
Regional value chains in Southern Africa
‘regional value chains’ (RVCs) within the academic and policy communities (Barrientos et al., 2016; McKinsey & Co., 2019; Pasquali, 2019). Yet our understanding of the dynamics behind RVCs remains limited. Historically, research on global value chains (GVCs) has given primacy to the role of lead firms and the gover
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