This article introduces and summarizes the key questions and findings of this special issue of Global Policy on the role of domestic and international institutions in the study of global value chains (GVCs). The article starts by briefly introducing the concept of GVCs and the state‐of‐the‐art of the existing literature focusing on the political implications of these landmark changes in the global economy. Then, we make a case for grounding this emerging literature more strongly into an ‘institutionalist’ perspective. More specifically, we argue that while a great deal of attention has been paid to intra‐chain governance modes – that is, the different ways in which firms organize their cross‐border production arrangements – the role external institutional forces play in structuring chain dynamics remains surprisingly under‐researched. These observations invite an analytical perspective that brings institutions back into the study of GVCs. The contributions to the special issue focus on multiple causal pathways linking GVCs and various types of domestic‐ and international institutions. Altogether, these contributions underscore that the politics engendered by GVCs, as well as how they evolve, can only be fully understood by paying attention to the external institutional context in which they are embedded.
Policy implications
- Political decisions about domestic and international institutions–be it their creation, strengthening or weakening – have crucial implications for how firms organize production and distribution within GVCs. The stakeholders involved in policy debates about the reversal of regional trade integration in the EU (Brexit) and North America (renegotiating NAFTA), should pay greater attention to these long‐term dynamics.
- Particular configurations of domestic institutions can enable countries to maintain and even expand output and employment in the manufacturing sector, even when these firms are highly integrated in GVCs. Policy debates about the reform of domestic systems of interest‐intermediation or labor market institutions cannot neglect the systematic effects these factors have on firms’ foreign investment choices, and on the resulting effects on patterns of domestic production and employment.
- While private standards and codes of conduct are often hailed as potential ways to govern GVCs, they either play a minor role or prove ineffective in many instances because of the lack of the necessary support of public actors. GVC‐related standard‐setting initiatives are more likely to be effective when devised though multi‐stakeholders processes envisaging an active role for both private and public actors.
- GVCs can activate relevant societal actors (i.e. Multinational Corporations) that have an interest fostering greater global economic integration and in upholding the international institutions that support it (i.e. the World Trade Organization), even in the face of reluctance from their own political leaders and rising popular protectionist sentiments. Policy debates about the appropriate degree of global economic integration in the coming years are likely to define by a confrontation between coalitions of actors operating within or outside GVCs.