Almost half of world trade is associated with global value chains (GVCs), whereby firms in one country produce parts and components to sell to firms in other countries. The productivity and growth effects of GVCs in many cases have been remarkable, but not all countries or firms have reaped the benefits. The World Development Report 2020 explores the rise in GVCs across countries and sectors, examines the implications of GVCs for development, and reflects on the appropriate policy response.
GVCs are not new. But improvements in transport and information and communication technologies and reductions in trade barriers accelerated the dispersal of production across borders. Arguably, international trade and the rise of GVCs have done more to support economic growth and reduce poverty than any other development over the past 30 years. Over that period, more than one billion people have pulled themselves out of poverty.
Notwithstanding their successes, GVCs may also be at least partly responsible for rising inequality and environmental degradation, as a result of hyperspecialization and increased trade. What's more, advances in robotics and artificial intelligence are raising concerns that GVCs no longer offer opportunities for countries with an abundance of low-skilled labor and that market concentration could increase. In addition, as countries raise tariffs and renegotiate or withdraw from trade agreements, trade openness cannot be taken for granted. Indeed, the expansion of GVCs seems to have plateaued since the 2008 financial crisis, which is of grave concern for development. Against this backdrop, the World Development Report 2020 considers what can be done to ensure that GVCs offer a growth path for countries, particularly the poorest, and that they are a force for sustainable development rather than divergence.
Table of Convents:
- Chapter 1: The New Face of Trade
- Chapter 2: Drivers of Participation
- Chapter 3: Consequences for Development
- Chapter 4: Macroeconomic Implications
- Chapter 5: Impact on the Environment
- Chapter 6: Technological Change
- Chapter 7: Policies to Enhance Participation
- Chapter 8: Policies for Inclusion and Sustainability
- Chapter 9: Cooperation on Trade
- Chapter 10: Cooperation beyond Trade