Brief History of SEZs and Overview of Policy Debates
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comprehensive cross-country analysis of the factors that contribute to zone program success or failure. This is particularly the case for lowincome countries and for the Africa region, as most research on zones has been focused where they have been most successful as an instrument for trade and industrialization—in East Asia. In addition, we need a better understanding of the specific investment climate factors that are linked to zone performance. A second set of issues that the research has not yet resolved is the distinction between static and dynamic outcomes of zone programs. As noted earlier, most of the formal analysis of zone program performance has been concerned with static measures: investment, exports, employment, contributions through taxes, indirect employment, and other short-term mechanisms. On the other hand, much of the descriptive work on the success of economic zones in East Asia depicts processes of structural economic change induced, at least in part, by the economic zones. More rigorous research is needed to assess the dynamic impact of zones across countries and to link the dynamic impact with static impacts, and with specific policies and practices within and related to the zones. This study addresses those questions. The report draws on the results of case study research and surveys of more than 600 investors in SEZs across the 10 countries and focuses primarily on understanding the performance of economic zones in Africa and other low-income countries, and on the factors that contribute to that performance.
Notes 1. Other definitions exist, some of them for specific legal and technical reasons. For instance, the Revised Kyoto Convention of the World Customs Organization defines free zones as “a part of the territory of a Contracting Party where any goods introduced are generally regarded, insofar as import duties and taxes are concerned, as being outside the customs territory” (cited by Creskoff and Walkenhorst, 2009). 2. Confusingly, some wide area zones contain within them other types of zones, such as FTZs and EPZs. Cities such as Singapore and Hong Kong—sometimes referred to as freeports or free ports—are not considered special economic zones under this definition. They are economies that offer free-trade-like conditions. However, Singapore does host special economic zones within its territory. 3. The Bracero Program was a 1942 agreement between the United States and Mexico for the supply of temporary workers to support the war effort. After