A dynamic spatial model of global governance structures

By Giorgos Galanis, Ashok Kumar

PKES Working Paper 1804

March 2018, revised April 2020

This paper presents a novel understanding of the changing governance structures in global supply chains. Motivated by the global garment sector, we develop a geographical political economy dynamic model which reflects the interaction between bargaining power and distribution of value among buyer and producer firms. We find that the interplay between these two forces, in combination with the spatial specificities of global production, are necessary and sufficient to drive governance structures towards an intermediate position regarding their level of explicit coordination and power asymmetry.

Keywords: Global value chains, global production networks, uneven development, disequilibrium dynamics, monopsony power

JEL classification: D02 D43 E32 F60 R10