Promoting Economic and Social Upgrading in GVCs: Evidence from the Capturing the Gains Program

Two major trends are reshaping the global economic landscape. The first is the rise of the ¿South,¿ as China, Brazil, India and other emerging and developing economies become increasingly important players. The second is the extent to which global production and commerce is increasingly organized into global value chains (GVCs), characterized by segmented production and negotiated supply relationships rather than either arms-length market transactions or vertically integrated multi-nationals. These economic trends have had profound implications for governance. The shift South partially dis-embedded the economy from institutions that had facilitated, regulated, and modulated market activities and outcomes in the advanced welfare economies of the North. The organization of production in GVCs created new challenges for states in the emerging South, as well as for international organizations and civil society actors intent on promoting economic development. The full implications of the new global industrial organization have only begun to be recognized by policy makers in governments, international organizations, and NGOs. Although many now ¿talk the talk¿ of GVCs, policy practices have been slow to change.