Success Factors for Implementation

At a Glance
  • SEZs need to be able to weather changes in economic and financial conditions, requiring resourcefulness in finding new revenue streams and adjust marketing strategies.
  • Even when an SEZ’s design is perfect on paper, how well it is managed and operated will have a large effect on the zone’s ability to meet key policy objectives.
  • Staff quality and retention among participating firms are key to the success of any zone.

Case Studies

Key Resources

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Impact of Special Economic Zones

This resource offers an overview of the efficacy and overall economic impact of special economic zones (SEZs) through an analysis of ...

Topic Briefing

SEZs are difficult to get right, even when the concept and design are sensible. Whether an SEZ meets its goals can depend on how it is managed, include the administrative and oversight system.

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Many SEZs have looked promising on paper but failed to deliver, because the stakeholders could not implement policies, provide oversight, or monitor outcomes. A participating firm’s staff quality and retention are key to SEZ success. In addition, many SEZs have failed to generate the necessary institutional cooperation. This failure reduces the value proposition of SEZs; arguably, investors face the same bureaucratic constraints as the wider economy, but often with an additional layer of delays and management. SEZs may also need to weather changes in economic or financial conditions and budget availability, so managers must be flexible and resourceful enough to find new revenue streams and adjust marketing strategies.

SEZs are, in part, an acknowledgment of constraints facing the wider economy. The scale of these constraints requires the focused implementation of different strategies, on a small scale. But it is important to note that SEZs cannot make up for these constraints on their own; therefore, it is critical that SEZs not replace reforms in the wider economy. Creating a permanent enclave can lead to both path dependence and stagnation.