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Special Economic Zones: Their Potentialities and Limits

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  • Antonella Rita Ferrara
  • Rosanna Nisticò
  • Francesco Prota

Abstract

The establishment of different types of economic incentive zones is one of the main economic policy tools used to attract investment and facilitate business activity. The basic idea is to trigger circular and cumulative growth processes that favour structural change. This category of instruments includes the Special Economic Zones, which have been present for some time in many countries across the world, both industrialized and developing ones. In Italy, the Special Economic Zones were formally established only in 2017 in southern regions and, after a long process of regulatory changes and reduced operations, they were included in the reform plan and in the investment programme of the National Recovery and Resilience Plan. Therefore, in the Italian case, it is an intervention designed to overcome the competitiveness gap affecting the southern industrial system over the past few years of great transformations. The available empirical evidence suggests that Special Economic Zones have contributed to the economic development of several, but not all, countries in which they have been established: in some cases, they have proved to be an ineffective tool in promoting economic growth leading to inefficient resource allocation and rent-seeking phenomena. This paper aims to examine the factors underpinning the success of this tool, and those that, in other cases, caused its failure. To this end, a broad review of the existing literature on the impact of this tool will be carried out.

Suggested Citation

  • Antonella Rita Ferrara & Rosanna Nisticò & Francesco Prota, 2022. "Special Economic Zones: Their Potentialities and Limits," Rivista economica del Mezzogiorno, Società editrice il Mulino, issue 4, pages 875-902.
    • Handle: RePEc:mul:jqyfkm:doi:10.1432/107769:y:2022:i:4:p:875-902
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