Wondering the same thing. Max do you know of any other countries that have tried EPZs that didn't see similar results, or other context for the subject?
Great question! Export Processing Zones, or more generally just Special Economic Zones are very common throughout the world (https://en.wikipedia.org/wiki/List_of_special_economic_zones), and they are a well-established tool of international development organizations like the IMF who helped Mauritius plan and implement their EPZ. There are varying levels of success, with some SEZ exploding growth like in Shenzen, and some that are less impactful like the ones you've never heard of. One has to keep in mind that SEZs comprise a wide range of policies. One SEZ could feature a mild relaxation of tariffs and some small tax incentives and another could host a completely free market. The effectiveness of SEZs depends in large part on how committed the host nation is to building a free market.
Very interesting, thanks. As a general rule of skepticism, I find these best cases not very replicable. Because of various obstacles, like poor or corrupt government. Jeffrey Sach's End of Poverty book lays out a similar "formula". With I guess mixed results these past 20 years, depending on how fast you think the developing world should be growing and alleviating poverty.
It's definitely a fair criticism that SEZs are vulnerable to poor or corrupt government, but this would also be a fair criticism of nearly any economic growth scheme ever proposed. The SEZ is cheap and easy to implement compared to many other growth strategies and it is completely voluntary. So my priors are strongly biased towards SEZs. I haven't looked super deeply at the empirical evidence, and im not sure its all that reliable just because of the inability to run an experiment. It's certainly possible that they aren't the best strategy but I do think they are cool lol.
Since SEZs promote growth and increase freedom, do you think entire countries should just embody such policies? Or is there a benefit to designated zones?
From a purely theoretical standpoint just having the whole world be a more free and integrated market would be definitely be better. From a political economy perspective, however, this isn't very likely. Politicians like designated zones better because it gives them something physical to point to and put in political ads, and voters feel less threatened by them compared to economy wide changes
How replicable is this for other similar countries? Other African countries?
Wondering the same thing. Max do you know of any other countries that have tried EPZs that didn't see similar results, or other context for the subject?
I replied to the original comment
Great question! Export Processing Zones, or more generally just Special Economic Zones are very common throughout the world (https://en.wikipedia.org/wiki/List_of_special_economic_zones), and they are a well-established tool of international development organizations like the IMF who helped Mauritius plan and implement their EPZ. There are varying levels of success, with some SEZ exploding growth like in Shenzen, and some that are less impactful like the ones you've never heard of. One has to keep in mind that SEZs comprise a wide range of policies. One SEZ could feature a mild relaxation of tariffs and some small tax incentives and another could host a completely free market. The effectiveness of SEZs depends in large part on how committed the host nation is to building a free market.
Very interesting, thanks. As a general rule of skepticism, I find these best cases not very replicable. Because of various obstacles, like poor or corrupt government. Jeffrey Sach's End of Poverty book lays out a similar "formula". With I guess mixed results these past 20 years, depending on how fast you think the developing world should be growing and alleviating poverty.
It's definitely a fair criticism that SEZs are vulnerable to poor or corrupt government, but this would also be a fair criticism of nearly any economic growth scheme ever proposed. The SEZ is cheap and easy to implement compared to many other growth strategies and it is completely voluntary. So my priors are strongly biased towards SEZs. I haven't looked super deeply at the empirical evidence, and im not sure its all that reliable just because of the inability to run an experiment. It's certainly possible that they aren't the best strategy but I do think they are cool lol.
Since SEZs promote growth and increase freedom, do you think entire countries should just embody such policies? Or is there a benefit to designated zones?
From a purely theoretical standpoint just having the whole world be a more free and integrated market would be definitely be better. From a political economy perspective, however, this isn't very likely. Politicians like designated zones better because it gives them something physical to point to and put in political ads, and voters feel less threatened by them compared to economy wide changes