Can there be value chains without values? Shadow economies and value chains

The shadow economy is not a “black or white” phenomenon but a continuum between illegal and unrecorded activities to legal and recorded activities. The shadow economy (or non-observed economy) needs to be explicitly considered because it affects the implementation of public policies and therefore the justification of State intervention. We study the impact of the shadow economy on the sustainability assessments of value chains. As an illustrative case, we studied all the mango value chains in Burkina Faso: Exports to Europe (by boat or by plane), continental exports, dried mangoes exports, juice production, and the domestic market. For the economic analysis, we considered the added value and employment. For the environmental analysis we considered distance and technology. For the social analysis we considered land access, child labor and women's employment. The shadow economy represents about 80% of the economy of Burkina Faso. About 96% of the working population does not have a permanent formal contract, i.e., no health coverage, no retirement plans, no insurance, and, by definition, no tax contribution. From an economic standpoint, we found that the shadow economy in the mango value chain represents only about 30% of the total added value, predominantly the FSC of fresh mangoes consumed in Burkina Faso. However, about 99% of the 27,000 of the farmers and workers involved in the value chains do not have permanent formal contracts. From an environmental standpoint, old and poorly maintained trucks over long distances affect negatively the environment. The absence or poor technology support from the State and the absence or poor-quality controls affect the environmental impacts of all the mango value chains. From a social standpoint, the shadow economy affects access to land with blurred boundaries between traditional and State laws. We noticed that schoolchildren were mobilized to help farmers during the harvest season. Such a work can be both considered as child labor from the international standards on child protection from international experts, but also be considered as a traditional norm and value from the local populations for sensitization purposes. We also concluded that an estimated 76% of female work takes place in the shadow economy. The quantitative aspects of value chains are necessary as well as the moral and ethical values they convey for sustainable development.