The Multi-Fiber Arrangement (MFA), the system of quotas that governed much of the global market for textiles and apparel for more than thirty years, was phased out in 2005. Two prevalent theories to explain why countries like Bangladesh and Sri Lanka have done well post-MFA, low wage rates and international influences, only partly explain variations in success in the post-quota era. 

In this paper, I argue that these countries are witnessing the emergence of a domestic policy network in their garment industries which explains the variations in competitiveness after the MFA phase-out. The literature on policy networks is vast, but this framework has rarely been applied to the developing country context. One of the most important aspects of this network is the dialogue among stakeholders, and countries with several effective mechanisms for facilitating this dialogue will have a stronger network of stakeholders influencing policy decisions.

In Bangladesh, I find that, post-MFA dialogue was increased among the different stakeholders through various means. The role of labor has also become increasingly important in the larger network. As these different stakeholders came together, they were able to create a consensus on the domestic policy agenda and begin to implement key policy reforms helpful to the industry.

In Sri Lanka, the policy network is weaker because of the limited role of labor in the larger domestic coalition. While there are several mechanisms for dialogue and interaction between the government and the private sector, there are few credible mechanisms to translate the concerns of labor into concrete policy changes. If labor continues to be excluded in Sri Lanka, the country will witness a less competitive garment and textiles industry as compared to Bangladesh.

Speaker Bio:

Sanchita Saxena is the Associate Director of the Center for South Asia Studies (CSAS) at UC Berkeley. In the Summer of 2010, Sanchita was a Public Policy Fellow at the Woodrow Wilson International Center for Scholars in Washington D.C. where she worked on her book, Policy Reforms Influencing Competitiveness in the Garments and Textiles Industries: Case Studies from Bangladesh, Cambodia, and Sri Lanka, (Forthcoming, 2012, New York: Cambria Press, Inc.).

Prior to joining CSAS, Sanchita was the Assistant Director of Economic Programs at the Asia Foundation, where she co-authored The Phase-Out of the Multi-Fiber Arrangement: Policy Options and Opportunities for Asia. Sanchita received her Ph.D. in Political Science (focus on Comparative Political Economy) from UCLA in 2002. Her research interests include politics of economic policy and reform, the role of NGOs in development, local economic governance and decentralization, and international trade.

Sanchita has taught courses on Comparative Politics and Political Economy at UCLA, UC Davis, the University of San Francisco, and UC Berkeley. She is a trustee of the American Institute of Indian Studies, the American Institute of Bangladesh Studies, and the American Institute of Sri Lankan Studies. Sanchita is also a member of the Advocacy Committee of Human Rights Watch, San Francisco.

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