{"id":23004,"date":"2023-02-06T09:26:03","date_gmt":"2023-02-06T14:26:03","guid":{"rendered":"https:\/\/www.bu.edu\/gdp\/?p=23004"},"modified":"2023-02-06T09:26:38","modified_gmt":"2023-02-06T14:26:38","slug":"the-political-economy-of-special-economic-zones-the-cases-of-ethiopia-and-vietnam","status":"publish","type":"post","link":"https:\/\/www.bu.edu\/gdp\/2023\/02\/06\/the-political-economy-of-special-economic-zones-the-cases-of-ethiopia-and-vietnam\/","title":{"rendered":"The Political Economy of Special Economic Zones: The Cases of Ethiopia and Vietnam"},"content":{"rendered":"<figure id=\"attachment23038\" aria-describedby=\"caption-attachment23038\" style=\"width: 646px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" src=\"\/gdp\/files\/2022\/12\/tron-le-wUk2U5Wirxg-unsplash-636x424.jpg\" alt=\"\" width=\"636\" height=\"424\" class=\"size-medium wp-image-23038\" srcset=\"https:\/\/www.bu.edu\/gdp\/files\/2022\/12\/tron-le-wUk2U5Wirxg-unsplash-636x424.jpg 636w, https:\/\/www.bu.edu\/gdp\/files\/2022\/12\/tron-le-wUk2U5Wirxg-unsplash-1024x683.jpg 1024w, https:\/\/www.bu.edu\/gdp\/files\/2022\/12\/tron-le-wUk2U5Wirxg-unsplash-768x512.jpg 768w, https:\/\/www.bu.edu\/gdp\/files\/2022\/12\/tron-le-wUk2U5Wirxg-unsplash-1536x1025.jpg 1536w, https:\/\/www.bu.edu\/gdp\/files\/2022\/12\/tron-le-wUk2U5Wirxg-unsplash.jpg 1920w\" sizes=\"(max-width: 636px) 100vw, 636px\" \/><figcaption id=\"caption-attachment23038\" class=\"wp-caption-text\">Ho Chi Minh City, Vietnam. Photo by Tron Le via Unsplash.<\/figcaption><\/figure>\n<p><span style=\"font-weight: 400;\">There were over 5,000 Special Economic Zones (SEZs) in the world, according to the\u00a0 United Nations Conference on Trade and Development (UNCTAD) in 2019. About <\/span><a href=\"https:\/\/unctad.org\/system\/files\/official-document\/wir2019_en.pdf\"><span style=\"font-weight: 400;\">75 percent<\/span><\/a><span style=\"font-weight: 400;\"> of developing economies and almost all transition economies use SEZs in their early stages of industrialization. While countries identify SEZs in different ways, they are defined as geographically bound areas in which governments facilitate industrial activity through fiscal and regulatory incentives and infrastructure support. From 2014-2018, 1,000 SEZs were established and at least 507 additional SEZs were planned for the next five years.\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Why have SEZs traveled so far and fast globally, especially in the Global South? How does this policy vary when it enters different national contexts?\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In a <\/span><a href=\"https:\/\/www.tandfonline.com\/doi\/full\/10.1080\/09692290.2022.2152073\"><b><i>new journal article<\/i><\/b><\/a><span style=\"font-weight: 400;\"> published in the <\/span><i><span style=\"font-weight: 400;\">Review of International Political Economy<\/span><\/i><span style=\"font-weight: 400;\">, <\/span><a href=\"https:\/\/www.bu.edu\/gdp\/profile\/keyi-tang\/\"><b>Keyi Tang<\/b><\/a><span style=\"font-weight: 400;\"> develops an SEZ policy adoption framework for developing or transitioning countries to compare how Ethiopia and Vietnam have learned from mainland China and Taiwan\u2019s SEZ policies. Drawing on field interviews with 53 key stakeholders, Tang argues that the recent wave of SEZ adoption among late industrializers is rooted in their desires to catch up, just as China and other Newly Industrialized Economies (NIEs) did.\u00a0<\/span><\/p>\n<h5><b>Main findings:<\/b><\/h5>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The pressure brought by globalization has pushed states to intervene in industrialization through investor-friendly industrial policies. SEZs, which have helped many East Asian countries achieve structural transformation, are appealing to latecomers because of these countries\u2019 fast growth and similar history of extreme poverty.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Following the three-stage policy framework developed by Tang, in the first-stage Ethiopia and Vietnam, under pressure of international competition and protectionism-led crises, political elites made policy changes and justified their legitimacy by opening markets for investment and trade.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">In the second stage, both countries still lacked the financial resources and technical capabilities to build the essential infrastructure needed for industrial production, so the first SEZ in Ethiopia and Vietnam was respectively developed by Chinese and Taiwanese investors.<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Political elites\u2019 took lessons on legislative and administrative institutions brought by powerful foreign investors, who have a first-mover advantage in transferring their SEZ development lessons to late industrializers.\u00a0<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Finally, Ethiopia and Vietnam demonstrate distinct SEZ management styles in line with the different historical institutions as the countries gained more experiences in SEZ development over time.\u00a0<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Ethiopia has a centralized SEZ management system, while Vietnam\u2019s system is relatively decentralized.\u00a0<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The SEZ adoption in developing and transition economies is a prime example of policy transfer between NIEs and late industrializers.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">While governments in the Global South use their agencies to emulate NIEs in using SEZ as a big push, industrial policy for fast economic growth, a coalition between NIE governments and investors plays a key role in transferring first-hand lessons on the initial institutionalization of SEZ legislation and administration.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The institutional settings of host countries, however, constrain their local variations of policy implementation, which may further affect these SEZs\u2019 performance.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Tang demonstrates the importance of policy transfer as a driver of SEZ policy and highlights the critical role that emulation plays in late industrialization. She adds that further research can explore the factors affecting SEZ performance and whether an industrial policy like an SEZ can lead to structural transformation in the Global South.<\/span><\/p>\n<a href=\"https:\/\/www-tandfonline-com.ezproxy.bu.edu\/doi\/full\/10.1080\/09692290.2022.2152073\" class=\"button\">Read the Journal Article<\/a>\n<a href=\"https:\/\/www.bu.edu\/gdp\/2023\/02\/06\/the-global-diffusion-of-special-economic-zones-evidence-from-ethiopia-and-vietnam\/\" class=\"button\">Read the Blog<\/a>\n","protected":false},"excerpt":{"rendered":"<p>There were over 5,000 Special Economic Zones (SEZs) in the world, according to the\u00a0 United Nations Conference on Trade and Development (UNCTAD) in 2019. About 75 percent of developing economies and almost all transition economies use SEZs in their early stages of industrialization. While countries identify SEZs in different ways, they are defined as geographically [&hellip;]<\/p>\n","protected":false},"author":19928,"featured_media":23038,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1149,156,72,105,1071],"tags":[1618,394,1049,530,576,1165,884,591,1973,3270,3273,3276,3272,3271,920,2596,3279,3275,2588],"_links":{"self":[{"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/posts\/23004"}],"collection":[{"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/users\/19928"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/comments?post=23004"}],"version-history":[{"count":5,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/posts\/23004\/revisions"}],"predecessor-version":[{"id":23445,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/posts\/23004\/revisions\/23445"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/media\/23038"}],"wp:attachment":[{"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/media?parent=23004"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/categories?post=23004"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/tags?post=23004"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}