ABSTRACT
At first glance, SEZs look like the optimal development policy. However, when looking deeper into the political economy of SEZs, it becomes clear they can also have powerful political effects, which are rarely mentioned in the literature on SEZs. Through their dynamic and political impact, SEZs have benefited people in ways we cannot always detect afterward. The political impact of SEZs is hard to discern through regular economic analysis. People may think of the time since the first modern SEZ as a half-century test ride of a vehicle during which the concept was not fully developed into what it should be but occasionally still managed to steer quite right. In the future, SEZs will likely be larger, more diversified, and more focused on regulatory and legislative reforms rather than fiscal incentives. This will make them more dynamic, less expensive, more conducive to natural market developments, and therefore more likely to improve on a country's economy.
