Win-win for Whom? Power and Inequality in the Chilean Wine and Farmed Salmon Value Chains

Global Value Chains (GVCs) are often heralded as providing win-win solutions for economic development in the Global South. Dominant approaches to GVC analysis promote participation and upgrading in GVCs to fuel economic growth, benefit poverty reduction, and reduce global inequality. Simultaneously, in business and NGO circles, GVCs are often framed as representing an opportunity for powerful lead firms to drive change in relation to pressing sustainability and human rights issues. This is contrasted by a growing body of scholarly research pointing to the hidden social and environmental costs of GVCs, and their contributions to inequality – globally and within countries of the Global South. GVC research has shown remarkable potential in providing insights into power relations that are impossible to capture with aggregate trade data. However, GVC research still has a reductionist understanding of value as “value-added” – effectively undermining any meaningful engagement with the processes and mechanisms through which value created in GVCs is captured and (re)distributed. Furthermore, research in this field still lacks a common understanding of what kinds of inequalities characterize GVCs.
This dissertation provides a guiding analytical approach to different dimensions of inequality in GVCs – inequality within chains (at the same node), along chains (between nodes), and through chains (in the wider system the chain is embedded in). Drawing on case studies of the Chilean wine and farmed salmon value chains, the dissertation provides empirical and theoretical insights into three mechanisms of value (re)distribution through which power in GVCs creates and reproduces inequalities: (1) intangible assets, (2) sustainability governance, and (3) dis/associations. These mechanisms are found to heighten inequalities between smaller and precariously integrated GVC actors in materially productive segments vis-à-vis more capitalized, larger actors with ownership of key intangible assets. The findings provide a contrasting story to the usual picture of Chile’s agri-food export success, which in orthodox GVC research has been seen to reflect an exemplary case of win-win GVC participation and upgrading.