Ask three people to describe a special economic zone (SEZ) and three very different images may emerge. The first person may describe a fenced-in industrial estate in a developing country, populated by footloose multinational corporations (MNCs) enjoying tax breaks, with laborers in garment...

Economic zones have grown rapidly in the past 20 years. In 1986, the International Labor Organization's (ILO's) database reported 176 zones in 47 countries; by 2006, it reported 3,500 zones in 130 countries. This huge growth occurred despite many zones having failed to meet their objectives;...

Economic theory, including endogenous growth, the role of institutions, and, most importantly, the New Economic Geography (NEG), have made significant progress in explaining the emergence of core-periphery patterns behind this divergence. They point to the critical role of agglomeration, which...