Outsourcing governance: states and the politics of a ‘global value chain world’

Abstract

Politics, and by extension states, are marginal in debates about the genesis, evolution and functioning of the global value chain (GVC)-based global economy. We contend here that the core complexity of state agency and state power needs to be much more carefully understood in GVC and related debates, as a basis on which the governance of the evolving GVC world can be properly theorised as revolving around the inseparability of economic and political power. We advance a framework for understanding the role of politics and states in the construction and maintenance of a GVC world, using a three-fold typology of facilitative, regulatory and distributive forms of governance, and propose a notion of ‘outsourcing governance’ as an attempt to capture the ways in which states purposefully, through active political agency, have engaged in a process of delegating a variety of governance functions and authority to private actors. Our overarching argument is normative: ‘outsourced governance’ of the form we currently observe is associated with regressive distributional outcomes, and is antithetical to an inclusive and sustainable global economy.