Policy Approaches to Supply Chain Risk

We provide a review of research on supply chain resilience and major international policy initiatives in 11 economies. We first present a set of cases in which supply chain risk may become excessive from a public policy standpoint. These cases include the presence of externalities and short termism in investing to reduce risk, as well as regulatory and informational issues. Certain characteristics of supply network structures can also affect risk. In practice, policy approaches to manage risk have varied by country, with some governments defining supply chain resilience more broadly than others. Some initiatives prioritise national dominance of supply chains over resilience. Few policies directly tackle informational limitations, with some exceptions, including proposals for early warning systems and stress testing requirements. We conclude by proposing questions for future research.