The domestic political economy of upgrading in global value chains: how politics shapes pathways for upgrading in Rwanda’s coffee sector*

Abstract

The Global Value Chains/Global Production Networks (GVC/GPNs) literatures have become the predominant international political economy frameworks to understand the challenge of economic upgrading under 21st century globalization. However, until recently, this literature has overlooked the role of the state (outside its regulatory responsibilities) and the explanatory power of domestic political economy. Meanwhile, literature on developmental states, industrial policy and political settlements has generally taken a methodologically nationalist perspective to examine economic transformation in developing countries. This article uses insights from the political settlements literature to contribute to the growing agenda within the GVC/GPNs literature to examine how the role of the state and domestic politics shape upgrading pathways in developing countries. Using the example of the Rwandan government’s attempts to increase specialty coffee exports over the last two decades, the article shows how the public governance of the domestic value chain, combined with governance dynamics in the coffee GVC/GPN, has shaped upgrading pathways in Rwanda’s coffee sector. By developing a domestic political economy approach within the GVC/GPN tradition, this article contributes to the growing attention within international political economy to focus on how multi-scalar pressures are shaping the outcomes of economic policy in developing countries.