Markus Schultze-Kraft

• Global value chains (GVCs) organise much of the contemporary world economy, shaping production, trade, and value capture across borders. While extensive scholarship has examined governance, upgrading, and power relations within GVCs, less attention has been paid to how illicitness is produced and stabilised within their everyday operation. This paper argues that illicitness is not simply a marginal deviation from global production, but a recurrent governance outcome under specific structural conditions. It develops a political economy account of GVCs as legally elastic systems in which jurisdictional fragmentation, outsourcing, subcontracting, and uneven enforcement generate durable opacity and enable selective compliance. The paper distinguishes between illegal practices that violate statutory law and illicit practices that are unauthorised, normatively proscribed, or rule evading, even when they are tolerated, quasi legal, or rendered effectively permissible through selective enforcement. Building on this distinction, it introduces the concept of shadow architectures to capture how regulatory arbitrage, legal insulation, useful illegality, wilful blindness, strategic negligence, and plausible deniability interact to stabilise illicit outcomes within formally legal GVCs. The argument does not reduce illicitness to criminal intent or particular actor types. Instead, it shows how illicitness emerges relationally from governance arrangements that shift compliance obligations and enforcement exposure onto lower tier actors while insulating dominant nodes. The paper’s contribution is conceptual and programmatic: it reframes illicitness as an embedded feature of legally elastic GVC governance, while specifying the conditions under which such outcomes are most likely to arise. It concludes by outlining a research agenda centred on seaports as critical nodes where the shadow architectures of global production become empirically visible.