Synthesis Documents

Value Chains for Development? Potentials and Limitations of Global Value Chain Approaches in Donor Interventions, by Cornelia Staritz, ÖFSE, 2012

    The global value chain (GVC) framework and the academic literature on GVCs that has developed in the last two decades are broadly used as a basis for donor-led value chain interventions. The paper argues that taking the GVC framework as a basis for interventions to support private sectors in developing countries has the potential to make PSD interventions more effective in terms of improving economic and social outcomes of participating in international trade and global production. To secure the effectiveness of value chain interventions and their development effects, two factors are however critical:

    First, integration in GVCs should not be seen as “a panacea” for development but as “windows of opportunity” that can have important development effects but should be complemented by more locally and regionally based development approaches (that may in itself involve the development of local or regional value chains). Second, the critical tradition and broader perspective of the GVC literature needs to be brought back and taken into account when re-designing existing or initiating new generations of value chain policies and interventions , in particular the focus on structural and asymmetric power relationships, the ambivalent role of lead firms, the important role of institutions and particularly the state and strategic state policies, and the focus on broader socio-economic and poverty reducing effects.