How Global Governance Structures Shape Economic Growth and Poverty Reduction: The Case of Textile and Apparel Value Chain

Abstract

Given the increasing disintegration of production and integration of trade, the industrial cluster literature’s view that localised market linkages are important in enhancing the growth of small enterprises seems insufficient as it ignores global linkages and fails to differentiate different categories of linkages. The global value chain (GVC) literature stresses the insertion of developing countries' producers in GVCs as a precondition for upgrading/growth. However, GVCs are differently organised due to, among others, different structures governing them. Hence, producers/economies integrated into GVCs are likely to attain different levels of economic upgrading/downgrading and decreased/increased poverty. Based on previous findings, this paper explores how the interactions between governance structures within and outside the global textile and apparel chain shape producers' growth and poverty reduction. The paper proposes options for producers to earn a relatively more return from the GVCs and attain sustainable poverty reduction strategies.