Value distribution and markets for social justice in global value chains: Interdependence relationships and government policy

Global value chains are highly prone to distortions in value distribution among participants. Their global fragmentation and relational governance undermine the effectiveness of regulatory intervention in amending these distortions. In this paper, I propose a new mechanism to administer value distribution that is in tune with the nature of these production systems. Building on interdependence theory, I suggest that interdependencies inherent in the co-specialized nature of supply chains give participants the power to alter the trade-offs between investment in social causes and economic gains and to incentivize socially desired behavior. I show how the interdependence logic manifests at varying levels of the GVC, including the producing constituencies, governments, and international organizations, as well as civil society. These dynamics create markets for social justice that are driven by relationships among GVC participants and operate simultaneously at different scales. I further posit that the effectiveness of interdependence relationships as a value-distributing mechanism is socially-constructed and outline the social conditions that determine the outcomes. I specify the varying impact of governments on interdependence relationships – as activators, facilitators, or inhibitors of the transformative power of interdependencies – and discuss their effectiveness.