The State in the Chains: Public policies against Adverse Incorporation in two Southern Italian Production Networks

In Apulia (Southern Italy), the adverse incorporation of local suppliers within global production networks (GPNs) in the tomato and textile-clothing industries has reinforced the processes of informalization and exploitation of a segmented workforce. In contrast with the literature that identifies the state as a residual regulator, or a mere facilitator of GPNs, we show that the state is called to intervene to ease the social costs of adverse incorporation. Our analysis, however, reveals that public interventions targeting supplier firms and relying only on market mechanisms to foster upgrading, fail to protect workers because they neglect the structure and power relations of the networks as well as the potentially progressive role that labour can play in formalization processes. This paper, therefore, adopts the concept of adverse incorporation and provides novel evidence to investigate the forces that drive the deterioration of working conditions and the structural causes of public policy’s failures within GPNs.