Received: 27 September 2016 Revised: 17 December 2016 Accepted: 9 January 2017

DOI 10.1111/gec3.12307

ARTICLE

Beyond facilitator? State roles in global value

chains and global production networks
Rory Horner1,2

1
Global Development Institute, University of
Manchester, United Kingdom
2
Department of Geography, Environmental
Management and Energy Studies, University of
Johannesburg, South Africa
Correspondence
Rory Horner, Global Development Institute,
School of Environment, Education and
Development, University of Manchester,
Manchester M13 9PL, United Kingdom of
Great Britain and Northern Ireland.
Email: rory.horner@manchester.ac.uk
Abstract
Designed to break with statecentric approaches to understanding
economic development, global commodity chain, global value chain
(GVC), and global production network (GPN) analyses have deep-
ened our understanding of the corporate governance of global lead
firms and associated development outcomes in an era of globalisa-
tion. Although this research field is recognised to have provided
considerable insight into private governance, a rapidly emerging
body of research has given greater attention to the role of the state
in GVCs and GPN. Although the state playing a role as facilitator
towards firms participating in GPNs has often been an emphasis,
this article argues that a variety of other roles are of increasing
prominence, including as regulator, producer (stateowned enter-
prises), and buyer (public procurement). A major challenge for both
policymakers and researchers is to understand how a range of state
initiatives not just shape but also are shaped by their positioning in
GVCs and GPNs.

KEYWORDS

economic globalization, governance, networks, trade, development

1 | I N T RO DU CT I O N

The global organisation of production has accelerated greatly over the last 2 decades during the neoliberal era of mar-
ket promotion, falling trade barriers, and the belief in limiting state intervention (Coe & Hess, 2013, 1; Gereffi & Stur-
geon, 2013, 209). In this era of intensifying globalisation, analytical frameworks focused on global commodity chains
(GCCs), global value chains (GVCs), and global production networks (GPNs) have been created with the explicit aim of
diverging from established statecentric analytical approaches to understanding economic development. Instead, the
GCC and GVC approaches have provided a relatively firmcentric focus on corporate governance and global lead
firms, notably in various typologies of interfirm relations (Gereffi, 1994; Gereffi, Humphrey, & Sturgeon, 2005; Ponte
& Sturgeon, 2014). The GPN approach has also emphasised the role of global lead firms and their networks (which
include nonfirm actors) in shaping economic development (e.g., Coe, Hess, Yeung, Dicken, & Henderson, 2004;
Henderson, Dicken, Hess, Coe, & Yeung, 2002).

Geography Compass. 2017;11:e12307. wileyonlinelibrary.com/journal/gec3 2017 The Author(s) 1 of 13

https://doi.org/10.1111/gec3.12307 Geography Compass 2017 John Wiley & Sons Ltd
2 of 13 HORNER

Yet, increasingly greater integration of state and firmcentric approaches to understanding economic globalisa-
tion has begun to emerge, including in research on GVCs and GPNs. Geographers have long argued that the state
really does matter under economic globalisation (Dicken, 2011, also 1994) and that transnational capital does not
operate in a borderless world (Yeung, 1998a). A number of contributions to international political economy have also
demonstrated that the state is of continued relevance in development policy intervention under globalisation (e.g.,
Carmody, Hampwaye, & Sakala, 2012; Mosley, 2005; Weiss, 2005), including through industrial policy (Gereffi & Stur-
geon, 2013; Lauridsen, 2010; Wade, 2010). Yet, it is only more recently that the bridging of insights on the role of the
state from literatures in economic development and industrial policy, and in GVCs and GPNs, has begun to gather
pace (e.g., Bhatia, 2013; Gereffi & Sturgeon, 2013; Kaplinsky & Morris, 2016). Increasingly, the state has been
recognised as an indispensable governance actor in GCCs, GVCs, and GPNs (cf. Lee, Heo, & Kim, 2014; Smith, 2015).
A facilitator role has arguably been the main emphasis of broad economic development and trade policy recom-
mendations in relation to GVCs by such international organisations as the World Bank (Cattaneo, Gereffi, Miroudot, &
Taglioni, 2013), World Trade Organization (WTO) (Elms & Low, 2013), World Economic Forum (2012), and United
Nations Conference on Trade and Development (World Investment Report, 2013). Some initial research suggesting
the deployment of the value chain framework in practice has been as part of a focus on a businessenabling environ-
ment (Neilson, 2014, 45) within a postWashington Consensus context of making markets work (Werner, Bair, &
Fernndez, 2014) policies that are facilitative towards firms in GVCs. Yet the contemporary era of a recent surge of
neonationalism and speculation of whether some retreat from globalisation is emerging as a result of renewed efforts
at protectionism amplifies the reality that a range of state roles may contemporaneously be adopted in GVCs and
GPNs.
What then are the possibilities for, and limits to, state action under globalisation as identified in the GCC, GVC,
and GPN frameworks? Providing a detailed review of this question, the article first traces the valuable insights of
research on GCCs and GVCs into the corporate governance role of global lead firms and their influence on develop-
ment, as well as attention to institutions and the state as external influences on GVCs. It then explores the relational
GPN approach, which has a greater emphasis on nonfirm actors and has potential to account for how states shape,
but are also shaped by, globalized production arrangements. A number of state roles within GPNs are then identified.
These include not only a facilitator role, which many studies have implicitly recognised, but also a number of other
rolesregulator, producer, and buyer. It is concluded that states continue to play key roles in governing development
within a world of GCC, GVCs, and GPNs and that the possibilities and limitations for roles beyond facilitator require
continued further attention.

2 | G C C s, G V C s, A N D G P N s : F R O M B R E A K I N G W I T H T O L I N K I N G UP TO
STATECENTRIC APPROACHES

Research on GCCs has sought to provide a new analytical approach for economic development in an era of economic
globalisation, a time when it has been observed that traditional boundaries between nations, firms, and industries are
being reconfigured (Gereffi 1996, 437). Although originating in worldsystems theory (Hopkins & Wallerstein, 1986),
the GCC concept was given impetus, and took on a new direction, from an initial collection of papers (Gereffi &
Korzeniewicz, 1994) and a subsequent body of work that focused on interfirm relations and the influence of global
lead firms as potential agents of upgrading and development (Bair, 2005, 157). The power of retailers, branded mar-
keters, and branded manufacturers, which engage in global sourcing in buyerdriven chains, was identified as a novel
feature of the late 20th century global economy and contrasted to producerdriven chains, where manufacturers were
the major coordinating agents of backward and forward linkages (Gereffi, 1994).
The GCC literature sought to move beyond the relatively statecentric literature on developmental states
(Amsden, 1989; Evans, 1995; Wade, 1990), to highlight the key role of relations with global lead firms in the economic
development of East Asia. Participation in GCCs and a linking up with global lead firms within buyerdriven chains
HORNER 3 of 13

were identified as critical for a series of cases of industrial upgrading involving Japan (1950s and 1960s) and newly
industrializing economies in East Asia (1970s and 1980s) and China (1990s; Gereffi, 1999).
The analytical orientation of the literature towards firm actors directly engaged in commodity and value chains
has reflected emerging features of the trend towards trade liberalization in the global economy, especially the power
of global buyers. The GCC framework has been particularly relevant in a context where many countries across the
Global South have abandoned importsubstituting, stateled industrialisation in favour of exportoriented strategies
to access and participate in foreign markets (Bair, 2005, 161). Reflecting the orientation of some of this earlier work
using the GCC approach, Bair and Gereffi (2001, 1900) observed:

Given that governments of industrializing countries have limited power to "get the institutions right," the
question becomes how firms can use their participation in global commodity chains to pursue
developmental goals.

From Gereffi's (1994) initial formulation, a consistent focus has been on interfirm relationships and corporate gov-
ernance, along with associated economic development outcomes. Although the side lining of institutional influence
was identified by Whitley (1996), subsequent work within what became the GVC framework has recognised more
types of interfirm governance (Gereffi et al., 2005; Ponte & Sturgeon, 2014).
Much of this and the wider body of research on GCCs and GVCs, with its emphasis on power dynamics in global
industries, has been rooted in understandings highly critical of the neoliberal approach and brings a more heterodox
approach to development (Gereffi, 2014, 27). Yet critically, Bair has suggested that an effective affinity, albeit unin-
tended, may have emerged between the neoliberal focus on marketdriven integration and the GCC and GVC
frameworks:

While the global value chain literature does not necessarily express scepticism or hostility towards the
state, the role of governments as potential facilitators (or inhibitors) of development receives scant
attention as compared with the emphasis placed on lead firms as agents of upgrading in most of the
GCC and GVC literature" (Bair, 2005, 174).

In a somewhat crude, yet somewhat telling, indicator of the focus of two prominent global chain articles (Gereffi,
1999; Gereffi et al., 2005), the word firm is used 56 and 100 times, respectively, whereas the word state is barely
mentionedtwice and never, respectively.

2.1 | GCC and GVC: bringing in institutions and the state

A number of calls for greater attention to the horizontal, institutional, and structural environments within which chains
are embedded (e.g., Bair, 2005; Gibbon & Ponte, 2005; Haakonsson, 2009; Lane, 2008; Neilson & Pritchard, 2009;
Palpacuer, 2008; Thomsen, 2007) have included emphasising the desirability of accounting for state power (Gellert,
2003) and of recognising that lead firms do not operate in an institutional and regulatory vacuum (Gibbon & Ponte,
2005, 84). When taken in the context of GCCs and GVCs, state policies have largely been seen among institutional
factors as external influences. State policy changes and particularly market liberalization have been identified as
enabling the rise of GVCs, particularly those that are buyerdriven (Gibbon & Ponte, 2005; Neilson & Pritchard,
2009). In examples such as the context of apparel production in East Asia and North America (Bair & Gereffi, 2001;
Gereffi, 1999) and international commodity agreements for coffee in Ghana (Gibbon, 2001), the most widely consid-
ered aspect of state policy (see also Bair, 2005) has related to trade issues, as for example, quotas, tariffs, and free
trade agreements. Some GVC research has also recognised the influence of states in facilitating upgrading (e.g.,
Giuliani, Pietrobelli, & Rabellotti, 2005; Lee, Gereffi, & Beauvais, 2012). Nevertheless, having explored private gover-
nance indepth and as part of a renewed attention to public governance, more recent research has explored the con-
nections and disjunctures between public and private governance in GVCs and GPNs (Bartley & EgelsZandn, 2015;
Gereffi & Lee, 2016).
4 of 13 HORNER

To date, and for the most part, the state has not been fully incorporated into the most widely regarded
conceptualisations of GVCs and economic development. Greater consideration is warranted of the variety of roles
that states can play within GVCs. Moreover, states are also shaped by globalisation (Hobson & Ramesh, 2002), and
state roles and broader agency must be considered in that context. With greater attention to nonfirm actors and
by seeing the state as an integral part of a network, rather than an external influence, the GPN approach has the
potential to address not just how the state influences GPNs but also how participation in GPNs influences the state
and its policy choices. Such an approach can also help demonstrate the limitations, as well as the possibilities, of state
and policy agency in economic development (Hess, 2008, 454).

2.2 | GPNs and the state: strategic coupling

By incorporating a wider variety of actors than the more firmcentred chain approach and so producing a broader
understanding of governance (Coe, Dicken, & Hess, 2008, 272; Yang & Coe, 2009), the GPN approach with its rela-
tional perspective seeks to account for firm actors both vertically in the chain and with reference to key horizontal
relationships that shape the transnational production of goods and services (Coe et al., 2004; Coe & Yeung, 2015;
Henderson et al., 2002; for services, see Kleibert, 2016). The GPN approach has scope to recognise collective power
(e.g., trade unions, employers' associations, NGOs, etc.) as well as being well positioned to recognise the state as a key
actor within global production (Coe et al., 2008, 282), including through its interaction with transnational corporations
(Dicken & Malmberg, 2001, 358). The GPN approach has been more open to the role of the state in its major concep-
tual contributions. Figure 1 below provides a simple, brief indicator of the greater attention to the state in the most
highly cited, conceptual GPN contributions, when compared to the more firmcentric GCC and GVC work.

FIGURE 1 Content analysis of the state and firm in mostcited global value chain and global production network
literature, by frequency
HORNER 5 of 13

Within the attention to national state (and regional) policies within the GPN literature, a major emphasis has been
on initiatives that will meet the strategic needs of key firms in GPNs to produce a strategic coupling, and thus cap-
ture value, within the production networks of global lead firms (Coe et al., 2004; Lee et al., 2014; Yeung, 2009). Firms
seek to take advantage of regulatory differences as they have potential locational flexibility, whereas states seek to
minimize such regulatory arbitrage. A bargaining power asymmetry may thus arise, which increases as the geographic
range of production expands. State and regional institutional bargaining power is high when regionspecific assets,
such as knowledge, skills, expertise, or a cooperative atmosphere, are highly complementary to the strategic needs of
focal firms (Coe et al., 2004, 475). Some East Asian states (e.g., South Korea and Taiwan) have managed to create a
strategic coupling with translocal actors (Coe et al., 2004; Yeung, 2009, 2016), including through an active role as an
interscalar mediator between lead firms and local actors (Lee et al., 2014). The U.K. and Indonesian states are cited
as states that have been less effective in this regard (Henderson et al., 2002, 450).

2.3 | Beyond strategic coupling and upgrading within lead firms' GPNs?
Despite its potentially more inclusive nature, selfreflection by some of the original GPN authors has noted that rel-
atively less attention has been given to the institutional environment surrounding such networks (Coe et al., 2008,
279) and has acknowledged a firmcentric, economistic approach to development, centred on integrating with global
lead firms (Coe & Hess, 2010). This emphasis raises concerns that a relatively narrow range of state roles and concerns
have been appraised in the GPN literature to date.
Beyond strategic couplingoriented policies, limited attention has been given to various other state roles, for
example, discouraging engagement with GPNs and owning stateowned companies or policies on public procurement.
Such state engagements with GPNs may be motivated by concerns which extend beyond simple capital accumulation
or upgrading within a particular production network (cf. Smith, 2015). In the case of oil, for example, energy security
concerns may shape state involvement in GPNs (Bridge, 2008), whereas welfare, national security, and geopolitical
objectives may also motivate the various roles identified below. With recognition of GVCs and GPNs as key to shap-
ing both processes and outcomes of uneven development (Werner, 2016), states may be considered to have a range
of motivations and differentially positioned in terms of agency, in relation to engagement with GPNs. A holistic per-
spective is consequently needed, which makes more explicit the mediating and variegated role of the state and in
which the limitations as well as the opportunities of GPNstate linkages are given greater recognition.

3 | STATE ROLES WITHIN GPNs

Some earlier analyses can act as a useful departure point for seeking to identify state roles within GPNs. In his
research on developmental states, conceived within a national framework, Evans (1995) created a typology of four
state roles of custodian, demiurge, midwifery, and husbandry. These roles were set in the context of statedomestic
business relations and in the context of developing new industries, yet not in the context of globalisation. In some
contrast, Dicken (2011) identifies a set of nationstate rolesas container of laws and practices, regulator, competitor,
and collaboratorwithin the context of globalisation. More recently, the role of the Korean state as both a container
of laws and practices (following Dicken, 2011) and also as a constructor of regional innovation systems has been
highlighted (Lee et al., 2014). Although some of the emphasis has been on the motivation behind, mechanism, and
effect of state actions, such as to collaborate or compete, it is proposed here that these and other contributions
together can help inform a typology of mechanisms of state influence within GPNs.
A distinction between the facilitator and regulator roles draws and builds on Gereffi and Mayer (2006). They refer
to facilitative policies as those that assist with the operation of markets, regulatory activities that seek to restrict the
negative externalities of private market transactions, and distributive policies that seek to limit and mitigate the
unequal impact of markets. Here, such roles are understood in relation to the activities of firms within GPNsthus
6 of 13 HORNER

the facilitator role involves policies and activities, which assist firms in GPNs, whereas the regulator role involves pol-
icies, which seek to limit and restrict their activities and shape the distributional consequences (thus including the dis-
tributive role, which some separate, e.g., Gereffi & Mayer, 2006; Mayer & Philipps, 2017).
Facilitator and regulator roles are both mostly implemented through the setting and implementation of state pol-
icies. Such policies have recently been broken down into (a) economywide horizontal policies, (b) industryspecific
selective or vertical policies, and (c) GVCoriented policies, which leverage international linkages to move to higher
value niches within chains (Gereffi & Sturgeon, 2013). Some debate exists over the merit of these distinctions. Wade
(2016, 7), for example, has recently suggested that the distinction between horizontal and vertical policies is largely
meaningless as, with the exception of education and basic health, most policies will affect some industries more than
others. GVCoriented policies may also be difficult to distinguish from other policies and may overlap. Nevertheless,
more broadly, increasing awareness has emerged that the context of facilitative and regulatory state policies may be
quite different in an era of GVCs. In this regard, different strategic approaches have been advocated for vertically
specialised and additive GVCswhich have been suggested to require thinning and thickening policies, respec-
tively (Kaplinsky & Morris, 2016).
In addition to the facilitator and regulator role, two further, somewhat less focused on, roles are then proposed in
Table 1 and the discussion belowa producer role in line with Evans' (1995) demiurge and a buyer role. States may
adopt these roles in various combinations as they seek to take control of, or influence, production networks, based
on considerations that may go beyond capturing greater economic value. These state roles are shaped by interactions
with domestic and foreign firms, business associations, civil society, and even other states and supranational institu-
tions. Moreover, distinct roles may affect different groups of firms and different locations in various waysbeing
graduated in terms of influence across various domains (Ong, 2000). Whereas some state policies may be facilitative
only for domestic firms (e.g., subsidies), others (e.g., limits on foreign ownership) may be specific to foreign firms. The
roles can be interrelated as, for example, many states have played an enhanced enabling role in economic globalization
by reducing the earlier regulatory capability (Dicken, 2011: 171).

3.1 | Facilitator
State promotion activities in relation to firms in GVCs and GPNs are particularly prominent and have arguably
received the most analytical attention. Although an observation made 2 decades ago, an implicit assumption of much
work on states under globalisation has been that when bargaining power asymmetry is high, little is possible other
than to provide an attractive business environment or to attempt to stimulate the kinds of local businesses that might
eventually be embedded in a TNC network (Dicken, 1994, 123). In line with this, in his early outline of the GCC

TABLE 1 Typology of state roles within global production networks

Role Definition Examples

Facilitator Assisting firms in GPNs in relation
to the challenges of the global economy
Regulator Measures that limit and restrict the
activities of firms within GPNs
Producer Stateowned firms, which compete for
market share with other firms within GPNs
Buyer State purchases output of a firm
Tax incentives, subsidies, export processing zones,
incentives for R&D, implementing and negotiating
favourable trade policies, and interstate lobbying
State marketing boards, price controls, restrictions
on foreign investment, trade policy (tariffs and quotas),
patent laws, labour regulation, quality controls, and
standards implementation
Stateowned companies, for example, in oil and mining.
Public procurement, for example, of military equipment
and pharmaceuticals.

Source: Author's construction.

Note. GPN = global production network; R&D = research and development.
HORNER 7 of 13

framework, Gereffi suggested that governments are primarily facilitators in exportoriented models of development
(Gereffi, 1994, 100). State adoption of such a role is also arguably shaped by the conditions of membership of the
WTO, which came into being in 1995 and put in place a framework for more liberalized global trade, and also by bilat-
eral and regional trade agreements, which increasingly shape state policies. With the use of the regulatory role
(reviewed below) more restricted, the policy space of many states has shrunk somewhat (Lall, 2004; Wade, 2003).
Facilitation is engaged in as states seek to promote, attract, and retain private investment, particularly that which
may be footloose and has considerable degree of locational choice, as well as to support local actors in order to par-
ticipate in these chains and networks. Facilitative activities and policies are long established and enacted and imple-
mented by investment promotion agencies and other state initiatives. Such measures can include transport and
communication facilities, export processing zones, and credit facilities and policy incentives such as tax breaks.
Depending on whether they support home or foreign firms and global lead or smallerscale firms, the precise facilita-
tive policies may take on varying forms. As well as domestic policy initiatives, states may also negotiate favourable
policies in interstate trade negotiations to support their domestic firms as they expand on an international scale.
Examples include the subsidies provided by the European Union and United States to their agricultural industries (Gib-
bon & Ponte, 2005, 5556), the public funding of research and development for biopharmaceutical firms by the
United States hidden developmental state (Block, 2008), and the case of Chinese firms being supported by ease
of access to credit from state banks, publiclyfunded research, and other financial and fiscal (e.g., tax concessions) ben-
efits (Moreira, 2007, 365). Such state support can play a major role in enhancing the power of global lead firms. For
example, China's goout policy, launched in 1999 and involving tax and financial incentives, has been suggested to
heavily tilt the playing field in favour of Chinese companies investing overseas (Moreira, 2007, 365). Such measures
can be adopted both to compete with other states to gain trade and investment and to collaborate to achieve certain
welfare goals (e.g., through trade negotiations; Dicken, 2011). Although the facilitation role has attracted considerable
attention based on the recognition that it is widespread and that many states have little agency, or policy scope, to do
otherwise, additional roles increasingly warrant attention.

3.2 | Regulator
The state also acts as a regulator within GPNs, limiting and restricting economic activity within its boundaries (Dicken,
2011, 178). Such an orientation can be adopted to protect various societal interests, be they of businesses (e.g.,
protecting selected industries and restricting monopolistic practices) and consumers (through quality standards and
competition legislation), of citizens (e.g., environmental concerns and defence concerns), or of workers (e.g., labour
regulations). Certain sectors, notably electricity, gas and water supply, and financial services, have considerable polit-
ical and economic sensitivity and are likely to necessitate specific measures (World Investment Report, 2013, 95).
The regulatory role was particularly prominent in the preWorld Trade Organisation era. For example, in the case
of many agrocommodity chains during the era of international commodity agreements (19621989 in coffee, for
example), state marketing boards controlled prices, set national export quotas, and managed the volume of product
reaching the world market (Gibbon, 2001; Lee et al., 2012). More broadly, state policies, which may limit engagement
with global lead firms, for example, by placing restrictions on ownership, or through performance requirements for
exports, technology transfer, or local procurement, have been a significant influence in fostering domestic firms
(Chang, 2004). In particular, such policies have been demonstrated to be successful where states had the capacity
to discipline firms through regulation in combination with providing policy favours through facilitative measures
(Amsden, 2001; Evans, 1995; Wade, 2010). Where states could not discipline firms, industrial policy was often less
successful, with firms receiving policy favours through facilitative measures, yet avoiding the regulations necessary
to create a more efficient or societally beneficial industry.
The regulatory role has declined in many countries following structural adjustment and broader policy shifts dur-
ing the neoliberal era, with state leverage often being undercut under globalisation (e.g., Evans, 1995, 2056). The use
of some regulatory policies is now restricted under the WTO (Lall, 2004; Wade, 2003), with less flexibility regarding
8 of 13 HORNER

the use of such instruments as restrictions on and performance targeting for foreign direct investment, local content
rules, export targeting, and subsidies. In some areas, lack of use of regulatory policies can be a product of state choice,
however, with cunning states sometimes choosing not to implement particular policies in accordance with the inter-
ests of (foreign) investors (Randeria, 2007). Given that firms and territories can be coupled within GPNs and that local
entrepreneurs can be bound up in transnational interests, interventions by states can be seen as increasingly difficult
and problematic (Yeung, 2014, 73). In some cases, a desire to attract and facilitate global capital can lead to the state
deliberately taming or underregulating labour, as Singapore has done to favour exportled growth (Yeung, 1998b) and
as Zambia has to attract Chinese investment (Carmody et al., 2012). Healthrelated initiatives can also be affected by
multinational pressure, for example, the intellectual property reforms in South Africa designed with a goal of making
medicines more affordable (Bond, 1999; Horner, 2015). At the same time, lead firms in GPNs can also pressure for
increasing regulation. Examples from Bangladesh and China show how global buyers, along with labour advocates,
can pressure the government to increase the minimum wage or introduce a new employment contract law (Barrientos,
Gereffi, & Rossi, 2011, 3089).
In spite of constraints, a variety of regulatory policies are still being put in place and are seeing somewhat of a
resurgence. In commodities, some public export monopolies still exist, such as in Ghana for cocoa. States can also
act to implement quality and safety standards, as the example of Peruvian asparagus demonstrates (Lee et al.,
2012, 12329). Regulating labour continues to be a key albeit challenging task for states in GPNs (Alford, 2016).
As a small number of examples within the context of GVC and GPN literature have shown, states continue to regulate
engagement with GPNs in order to encourage the development of domestic industries. Foreign automobile compa-
nies' local production in China has been encouraged by obligated embeddedness (Liu & Dicken, 2006), whereas for-
eign ownership has been restricted in India's retail sector (Franz, 2010), and local content and production
requirements have been put in place in Brazil's electronics and communications industries (Gereffi & Sturgeon,
2013). Citing figures showing 400 new protectionist measures globally since 2009 (during the global economic crisis),
the Economist (2013b) suggests that policymakers have become choosier about whom they trade with, how much
access they grant foreign investors and banks, and what sort of capital they admit. The 2013 World Investment
Report has also documented increased restrictions by some states such as screening and monitoring of foreign direct
investment, including mergers and acquisitions (World Investment Report, 2013, 92). As well as being oriented
towards strategic decoupling to develop domestic industries (Horner, 2014), such regulatory measures can be intro-
duced for the protection of national champions, strategic enterprises, critical infrastructure, and national security
concerns. Thus, despite restrictions on policy scope, and sometimes lack of political will, the regulatory role of states
is still particularly relevant in an era of GPNs.

3.3 | Producer
In the context of GPNs, the state may also act as a producer via operating its own stateowned companieswhat
Evans (1995) identified as the demiurge role. Stateowned production is engaged in as states seek to take control
of productive capacity in key strategic sectors (e.g., security and natural resources) or to boost or kickstart production
in industries where the private sector may be less likely to invest. Stateowned enterprises (SOEs) challenge the oft
invoked dichotomy of firm and state and are examples of firms with nonbusiness motivations (CuervoCazurra,
Inkpen, Musacchio, & Ramaswamy, 2014). In addition to entities which are fully stateowned and controlled,
firms may also be government linked where the government has a stake but does not completely manage or control
(Coe & Yeung, 2015, 77).
SOEs continue to be significant in the global economy, despite privatisation in some countries. They comprise
about 10% of the world's largest public firms (those on the Forbes Global 2000 list) and are increasingly engaged in
international trade (Kowalski, Bge, Sztajerowska, & Egeland, 2013). Such firms are prominent across a range of coun-
tries as diverse as China, India, Russia, and the United Arab Emirates and are key producers and suppliers in various
sectors. The internationalization of SOEs on a large scale has grown significantly in extent (CuervoCazurra et al.,
HORNER 9 of 13

2014). Chinese firms, particularly in energy, mining, and construction, have been especially active internationally (Hen-
derson & Nadvi, 2011). In Zambia, for example, Chinese stateowned companies have made significant foreign invest-
ment. Indeed, the case leads Carmody et al. (2012) to suggest a rise of the statein this instance the Chinese state
under globalisation. More broadly, through this role, the state can act as a competitor to privately owned firms across
many parts of the Global South, as Latin American firms have found when competing with Chinese SOEs (Moreira,
2007). Although a recent international business collection has explored stateowned multinational enterprises in
depth (CuervoCazurra et al., 2014), they remain underexplored and warrant further investigation in relation to their
involvement in GPNs.

3.4 | Buyer
The state can act as a buyer within GPNs, as public procurement can involve largescale purchases by states from pri-
vate firms. Procurement takes place as stateowned organisations need particular inputs in order to provide essential
social services as well as for the operation of their own firms. Public procurement has been estimated to comprise an
average of between 13% and 20% of GDP worldwide (OECD, 2013). Given its economic size, procurement is an
important aspect of international trade and thus GPNs (World Trade Organisation, WTO, 2014). Although, and to
some degree because, tariff barriers to trade have been significantly reduced, public procurement is an increasingly
prominent nontariff barrier to trade. Domestic suppliers are often favoured over foreign (Rickard & Kono, 2014).
Some regulations are inscribed in the 1994 WTO Agreement on Government Procurement, which seek to ensure
national treatment (where imported and locally produced goods are treated equally) and nondiscrimination, opening
the potential to compete for public supply. A revision came into force in 2014 to make the procurement rules more
transparent. Yet not all WTO members follow the plurilateral agreement, with only 47 WTO members bound by it
(as of late 2016WTO, 2016). Recent work suggests that these agreements have actually had limited impact in reduc-
ing discrimination against foreign suppliers (Rickard & Kono, 2014). Nevertheless, procurement policies are included in
ongoing megaregional trade negotiations, such as for the Transatlantic Trade and Investment Partnership, which may
substantially alter procurement practices.
Lucrative business opportunities are involved for those firms that are able to secure contracts, with their produc-
tion networks having to adjust towards serving the state(s) as a major purchaser (see, for example, Hughes 2015). In
the United Kingdom, for example, the National Health Service acts as a major buyer of medical devices, capital equip-
ment, and also food. In many countries, including notably in the Global South, public procurement of medicines is a
major portion of the government health budget and purchase patterns can significantly shape industrial development
within pharmaceuticals. As well as public sector organisations, the state can also act as a buyer through statecon-
trolled firms, with Petrobras in Brazil, for example, recently mandated to buy more equipment from local companies
(The Economist, 2013a). In one more historical example through research using a GPN approach, Korean firms were
noted to benefit from U.S. military contracting during the Vietnam War (Glassman, 2011). As with the regulator and
producer roles, considerable scope exists for further indepth research into the dynamics of the state as buyer within
GPNs and the development implications.

4 | C O N C L U S I O N : S T A T E S A ND G P N s B E Y O N D FA C I L I T A T I O N

The state has increasingly been recognised as a crucial actor in GVCs and GPNs, especially in comparison to the initial
GCC, GVC, and, to a lesser extent, GPN literature. Although earlier research partly reflected an empirical reality of a
shift away from stateled approaches to development, it emphasised the growing influence of forms of corporate gov-
ernance in shaping development outcomes. Yet with states once more seeking to assert their influence in ways that
were not the case at the height of the marketled development era, as well as the increasing interest of policymakers
in GVCs, the state within GPN nexus has become an issue of increasing relevance.
10 of 13 HORNER

Rather than analytically viewing its influence as an external actor as in the GVC approach, the GPN approach
situates the state within the network and thus shapes, but is also shaped by, other actors within the GPN. This
twoway dynamic between the state and other actors in a GPN is central to understanding the possibilities for and
limitations to certain state roles and associated policies in the context of an integrated global economy.
This article has emphasised that the engagement of states with GVCs and GPNs clearly goes beyond strategies
and policies solely aimed at upgrading or strategic coupling with global lead firmsan emphasis that emerged within
much GVC and GPN research partly owing to the limited range of policies followed at the height of neoliberal glob-
alisation. Building on recent work in this field, this article has proposed a typology of four state roles within GPNs
facilitator, regulator, buyer, and producer. Various recent developmentsnotably the United Kingdom's planned exit
from the European Union and speculation over the possibility of protectionistoriented national initiatives under
Donald Trump's presidency of the United Statesall suggest the increasing empirical relevance of state roles beyond
facilitating GVCs and GPNs.
Future research attention is needed to the influence and viability of the regulator, buyer, and producer roles and
how they manifest in a context of a potential retreat from, or even reformulation of, economic globalisation. For
example, a growing proliferation of restrictive policies visvis value chains has been noted by United Nations Con-
ference on Trade and Development, yet they have been noted as posing a risk of investment protectionism, and their
viability has been questioned (e.g., World Investment Report, 2013: 92). Relatively little research has explored this role
to date or that of public procurement and state ownership. The location of states within a world of GPNs means both
that current policy initiatives to promote national interests are likely to vary and to have different implications from
earlier eras.

Ack n ow ledg ements

Many thanks are due to Martin Hess and Khalid Nadvi for comments on earlier drafts of this manuscript. The article
also benefited from constructive feedback from the section editor, Pat Noxolo, as well as two anonymous reviewers.
Finally, I gratefully acknowledge the support of an Economic and Social Research Council Future Research Leader
Award (ES/N001885/1) and a University of Manchester Hallsworth Research Fellowship, both of which helped
inform and support the writing of this article.

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How to cite this article: Horner, R. Beyond facilitator? State roles in global value chains and global production
networks. Geography Compass. 2017;11:e12307. https://doi.org/10.1111/gec3.12307