This brief is part of the Insights @ Center for Emerging Markets, a publication focused on cutting-edge ideas and advice for global leaders about emerging markets.

By Shengwen Li (Western University, Canada) & Anthony Goerzen (Queen's University, Canada) 

In Short: Global value chains often rely on labor in low-income countries, where gender inequality persists. Shengwen Li and Anthony Goerzen studied a Village Savings & Loan Association (VSLA) intervention in the Democratic Republic of Congo's artisanal mining communities. The NGO-led project aimed to empower women through financial access, legal gold sales, and leadership opportunities. While the initiative initially improved women's confidence and economic standing, these gains diminished once NGO support ended. The study highlights both the potential and limitations of targeted interventions, emphasizing the need for long-term, sustainable strategies to ensure enduring improvements in gender equality within global value chains.

Global value chains represent the process of creating and delivering goods and services from start to finish across different countries. In doing so, multinational corporations often offshore production to poorer nations where they may inadvertently perpetuate inequalities, including gender-based discrimination. Although women's economic conditions have improved in much of the world, it persists in many low-income countries where women are relegated to subordinate positions that might include unpaid, insecure, or informal work.

Shengwen Li and Anthony Goerzen examined the impact of a targeted intervention aimed at improving women's empowerment within artisanal mining communities in the Democratic Republic of Congo (DRC), a country rich in minerals that fuel global industries but that has also been affected by prolonged conflict and governance challenges. The focus was on artisanal and small-scale mining (ASM), a sector known for difficult and dangerous working conditions, significant human right risks and limited regulation.

Despite these challenges, Li and Goerzen were able to study how a non-governmental organization (NGO) introduced a Village Savings & Loan Association (VSLA) project across six mining ASM communities. This initiative aimed to boost financial and employment opportunities, specifically promoting female leadership within project groups and fostering broader inclusion. Key components included providing secure access to savings and credit, incentivizing legal gold sales, promoting cash use over informal credit, and explicitly prioritizing the inclusion and empowerment of women, including miners and those in support roles.

Drawing on survey data from over 2,100 individuals between 2018 and 2020, the researchers compared communities with the VSLA program to control groups without it, also analyzing the impact before and after the NGO ceased its direct operational support.

Initially, the VSLA program demonstrably improved the situation for participating women. Compared to those outside the program, participants showed enhanced self-confidence regarding their capabilities and experienced tangible improvements in their personal economic standing, such as having more savings or owning land. While the NGO was actively involved, the intervention clearly boosted key aspects of women's lives.

However, the research also raised serious concerns about sustainability of the intervention. Once the NGO concluded its direct support, the positive effects on women's empowerment faded and were no longer statistically significant. This starkly emphasizes that while targeted interventions can yield positive short-term results, lasting change requires sustainable, long-term strategies.

Practical Implications

Multinational corporations often play a vital role in funding and enabling NGOs to implement programs like the VSLA as part of their sustainability and compliance initiatives in their global value chains. Yet, achieving meaningful progress on gender equality and women's empowerment requires more than financing pilot projects. Lasting empowerment necessitates a long-term commitment, focusing on building sustainable structures and capabilities within communities that can endure long after initial program support concludes.

To move from transactional to transformational impact, companies must shift from passive donors to active partners. By fostering collaboration between suppliers, local government entities, and community groups, multinational corporations can create a more robust ecosystem that supports women's economic and social participation long after specific NGO projects end. Ultimately, sustainability is achieved when the principles of empowerment become locally owned and driven, rather than being perpetually reliant on external intervention.

Original Work

Li, S., & Goerzen, A. (2024). Improving global value chain governance: Empowering women through third-party interventions within institutionally fragile contexts. Journal of World Business, 59(3), 101533.

Contact

If you are interested in learning more about this work, contact Professor Shengwen Li at [email protected]