Bringing the social context back in: governance and wealth distribution in global commodity chains

Abstract

This paper addresses recent changes in governance patterns that significantly altered power relations and wealth distribution in global commodity chains. First, it emphasizes the rise of a financial sphere made up of institutional investors and executives of large corporations at the top of GCCs, and discusses the consequences of this for supplier relations and working conditions of women workers at the base of GCCs. Second, by linking recent governance debates at the level of the firm to issues of governance of the whole chain, it identifies three distinct normative views (shareholder, stakeholder and institutional) of the ways in which the distribution of social welfare can be improved in GCCs. Beyond the shareholder and stakeholder views, a call is made for strengthening an institutional view of GCC governance.

Keywords:

• global commodity chains
• financialization
• supplier relations
• work conditions
• governance
• wealth distribution

Notes

1. Acknowledging the non-neutral consequences of using a GVC versus GCC terminology (Bair, 2005), I refer to GCC in this paper in order to emphasize the widespread process of ‘commodification’ (rather than ‘value creation’) that the rise and spread of GCCs convey in production and consumption patterns across countries.

2. As indicated in annual reports and interviews with consultants and top executives conducted in 2000 and 2001.

3. Thanks to Peter Gibbon for allowing me to quote these citations from interviews that he conducted in the UK in 2001.

4. Such information is not available for EPZs in China and Indonesia, although other sources indicate a predominance of women in these zones as well (Thorborg, 2006; Rodinelli, 1987).

5. Title borrowed from CCC (2005).

6. These remarks are based on interviews performed with SMOs in the clothing industry of Canada and Europe within the context of an on-going research project on transnational SMO networks.