The world is, and always has been, interconnected. But the degree of country interdependence we are witnessing now is unprecedented.
Cross-national transactions are fundamentally different, both qualitatively and quantitatively, from when the last World Development Report on 'Industrialization and Foreign Trade' was written thirty years ago.
Tariff reduction and significant advances in production, communication and transportation technologies led to the emergence and expansion of GVCs. The result was growth in global trade at twice the rate of income growth from the early 1990s until the mid-2000s.
Today, production is fragmented and distributed across multiple places, and the parts produced in each place are shipped across the globe often crossing borders multiple times.
The 2020 World Development Report will analyze the implications of the changing face of globalization for development.
It will explore why global value chains (GVC) have formed in some sectors and regions, while others have been left out. It will examine how GVCs affect growth, inequality and poverty, as well as the transmission of shocks across countries.
The report will consider whether new technologies or a change in trade policies create incentives to produce closer to home, reducing the potential for countries to benefit from a finer international division of labor.
Finally, it will explore how national policies can promote sustainable development in a GVC world.
But because production has become fragmented across countries, national policy is unlikely to be enough.
The report will also consider how international cooperation on trade and other policies can support inclusive growth in a GVC world.