There has been a growing concentration of the global economy in the hands of transnational corporations (TNCs). The largest TNCs have bigger revenues than many governments around the world. The importance of these firms means they have considerable power over their suppliers and customers – as well as being important political actors. In this paper we contribute to integrating developments in the assessment of power in global value chains (GVC) and industrial organization literatures. First, we deepen and extend the Dallas et al. (2019) typology of power framework by highlighting how developments in the industrial organization literature on bargaining power, buyer power and vertical arrangements can provide a deeper understanding of forms and effects of power in supplier-buyer relationships in GVCs. Second, we consider how competition authorities as regulators shape markets and value chains and the different ways in which this interacts with accepted norms of ‘fair’ market conduct in countries. We use two industry case studies, which are both drawn from Southern Africa, to reflect on the ways that an integration of the literatures provides useful insights about the outcomes in the value chains in question.

Presentation 2
Maha Rafi Atal and Pamela Mondliwa (3rd co-author Sha’ista Goga )

“There’s an App for That”: Mobile Finance, Monopoly Banks and Economic Development in South Africa

In recent years, two parallel technological changes have begun to transform the South African banking sector. First, financial technology startups have emerged, offering payments and other services across multiple bank accounts via bespoke mobile apps, powered by a combination of official access to bank APIs and unofficial screen scraping. Second, established banks have expanded their mobile offerings through apps that connect to third-party messaging services from companies such as Facebook and Tencent. This paper considers the political economy implications of these “app-based banking” products. First, it argues that while the proliferation of fintech startups suggests an open marketplace with few barriers to entry, the products these companies offer supplement rather than replace consumers’ existing bank accounts, a barrier to meaningful competition between established and emerging firms. Second, it argues that the combination of bank access, mobile access and internet access required to use these new products limits their reach to elite consumers. This pattern stands in contrast to the path of new financial technology elsewhere in sub-Saharan Africa, where mobile finance has played an emancipatory role for previously unbanked populations and contributed to economic development. In South Africa, by contrast, where a relatively high proportion of consumers have access to traditional banking, but few can afford access to mobile data, the desire of financial firms to replace physical branches and in-person customer service with mobile applications is potentially regressive and exclusionary.