Special Economic Zones: What Have We Learned?

It has been more than 50 years since the establishment of the first modern special economic zones. During this time, SEZs have been credited with underpinning the dramatic export-oriented growth of China and other East Asian countries. While they remain a controversial instrument, policy makers appear to be increasingly attracted to economic zones. Since the mid 1980s, the number of new zones has grown rapidly, with significant expansion in developing countries. But in this postcrisis environment, the context in which zones operate is changing. Increasingly, the effectiveness with which they are designed, implemented, and managed will determine their success. This note outlines key lessons that have emerged from the experiences of zone programs in developing countries over recent decades.