Inclusive Growth Through Fair Trade: An Empirical Case of NGOs’ Involvement in China

Abstract

As a response to imbalanced economic development across different regions, this study aims to explore how the Fair Trade nongovernmental organisations (NGOs) promote inclusive growth in areas facing insufficient institutional supports and challenging local conditions in a developing market. Through a 5-year longitudinal case study in the context of small-scale tea supply from rural China, this paper explores and identifies a set of institutional voids blocking economic growth and challenging the realisation of the Fair Trade goals. We systematically describe how the Fair Trade NGOs intervene and integrate with other actors in local supply chains. The results reveal important and complex roles the NGOs play in coping with the institutional voids to stimulate Fair Trade. From an institutional perspective, this paper finds that the Fair Trade NGOs can leverage and shape local institutions through collaboration in market structure building, norm promotion, and cognitive development to achieve inclusive growth. Our findings contribute to the understanding of the crucial roles NGOs may play in Fair Trade, inclusive growth, and poverty alleviation. They offer important and practical guidance for NGOs, small farmers, as well as relevant government agencies in their initiatives to fight poverty and achieve economic equality and inclusive growth.