ABSTRACT
This chapter examines the role of special economic zones (SEZs) in promoting employment growth, raising productivity and generating spill-over and linkage effects which benefit the rest of the economy. There is a well-established debate on the role of the state in steering development and governing the market (e.g. Wade, 1990). Recent developments in the theory and practice of growth identification and facilitation suggest there is an important role for the state in supporting growth. 2 The main growth policy tool considered in this debate is the creation of SEZs (and export processing zones – EPZs) as a means of attracting foreign direct investment (FDI) (Madani, 1999; ILO, 2008; Farole, 2011; Farole and Akinci, 2011). The recent emphasis on the success of SEZs in middle income countries, and on the new SEZs being built by emerging markets in Africa, is leading to a reassessment of whether SEZs can help to facilitate development transformations (Draper et al., 2011).
