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Journal of Globalization and Development

Ed. by Stiglitz, Joseph / Emran, M. Shahe / Guzman, Martin / Jayadev, Arjun / Ocampo, José Antonio / Rodrik, Dani

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Rich Consumers and Poor Producers: Quality and Rent Distribution in Global Value Chains

Johan Swinnen1 / Anneleen Vandeplas2

1University of Leuven and Stanford University

2University of Leuven

Citation Information: Journal of Globalization and Development. Volume 2, Issue 2, ISSN (Online) 1948-1837, DOI: 10.1515/1948-1837.1036, January 2012

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Quality standards are rapidly gaining importance as a result of increasingly globalized trade. Rich country quality requirements are said to have detrimental effects on poor producers in developing countries because they would introduce new trade barriers, prevent small and poor producers from participating in high quality supply chains, and allow multinationals to extract rents. We analyze under which conditions the introduction of quality standards in global value chains may benefit poor producers in developing countries, taking explicitly into account key characteristics of these value chains. We investigate the effects of competition and development and discuss a series of policy implications.

Keywords: contracting; imperfect enforcement; development; rent distribution; value chains

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