Commodity chains, services and development: theory and preliminary evidence from the tourism industry

Abstract

Global commodity chains (GCC) present a fairly new and innovative approach for understanding the prospects for development among Third World countries within a larger environment characterized by globalization. To date, most research using the framework concentrates on the changing organization of manufacturing activities and helps to explain why the chains touch down where they do. This article concentrates on two related questions: what can commodity chains tell us about the globalization of services and to what extent do services suggest the need to refine the GCC approach? Both questions are examined by focusing upon tourism, the largest service activity in the world. Concentrating on hotels and airlines, the article demonstrates that tourism services have become internationalized in a manner unlike manufacturing activities. Most notably, organizational or governance structures do not conform to either buyer-driven or producer-driven models frequently predicted by GCC analysis. The article concludes that while commodity chain analysis is useful for examining the political economy of tourism, especially in highlighting power and exchange relationships, it must be broadened to 'account' fully for the unique organization of the global tourism industry.