Special economic zone : performance, lessons learned, and implication for zone development

Abstract

This study analyzes the major development trends in terms of zone configuration, ownership, development, management, and regulation approaches, and identifies good practices. It evaluates the overall economic performance of zones in light of these changes, and assesses the relationship of zones and economic reform efforts. The ultimate goal is to draw out lessons and implications that will enable policymakers to design and facilitate zone development that maximizes benefits to their host economies. The analysis is based on a review of recent studies and assessments of export processing zones (EPZs) and free zones, as well as a stocktaking of zone programs worldwide, including ownership patterns, legal and regulatory frameworks, institutional frameworks, ownership and management approaches, incentives, and economic impacts. To evaluate the complex linkages and impacts of zones and economy-wide policy reform efforts, a number of case studies of zone programs were under-taken and previous cost/benefit assessments analyzed. This paper is organized as follows: the second section, zone definition and development trends, documents growth patterns and key characteristics of zones internationally and regionally. The third section, zone growth and key characteristics, outlines recent changes in zone concepts, development approaches, and policy and institutional frameworks. The fourth section, economic performance and impacts, evaluates the overall economic performance of zone development and key socio-economic impacts. The last section, lessons learned and implications for zone development, assesses why some zones have failed, identifies key success factors, and delineates guidelines to maximize the success of new zones.