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Balanced or Unbalanced Development: Special Economic Zones as Catalysts for Transition

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  • John Litwack
  • Yingyi Qian

Abstract

Journal of Comparative Economics, March 1998. We develop a theory for a transition economy under which an unbalanced development strategy that favors special economic zones emerges as a response to two critical problems: (1) political pressure to satisfy certain social expenditure requirements, and (2) the lack of institutions to constrain the state from expropriation. By promoting the concentration of resources in some areas, a low equilibrium trap can be avoided, while important spillover effects may be generated elsewhere. The experience of China with special economic zones and coastal open areas is interpreted in this light. Some problems in the Russian economy are also discussed in the context of this theory. Key Words: Unbalanced Development, Special Economic Zones, Political Constraint, Commitment, Transition Economies Journal of Economic Literature Classification Numbers: O20, P41, H30

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  • John Litwack & Yingyi Qian, "undated". "Balanced or Unbalanced Development: Special Economic Zones as Catalysts for Transition," Working Papers 97044, Stanford University, Department of Economics.
    • Handle: RePEc:wop:stanec:97044
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    File URL: http://www-econ.stanford.edu/faculty/workp/swp97044.pdf
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    References listed on IDEAS

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    Cited by:

    1. Wojciech Lichota, 2016. "Efektywność finansowa specjalnych stref ekonomicznych w Polsce," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 1, pages 99-130.
    2. World Bank, 2011. "Russia : Reshaping Economic Geography," World Bank Publications - Reports 13052, The World Bank Group.

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    More about this item

    Keywords

    Unbalanced Development; Special Economic Zones; Political Constraint; Commitment; Transition Economies;
    All these keywords.

    JEL classification:

    • O20 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - General
    • P41 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Planning, Coordination, and Reform
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General

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