Exporting Processing Zones, Industrial Upgrading and Economic Development: A Survey
Author(s)
Milberg, William
Abstract
Export processing zones (EPZs) are those regulatory spaces in a country aimed at attracting export-oriented companies by offering these companies special concessions on taxes, tariffs and regulations. This paper surveys the recent evidence on EPZs, summarizing trends in their size and scope, recent changes in EPZ strategy and regulation, and the recent research on the consequences of EPZs for economic development. Across many cases in many countries over decades of time, export processing zones have often generated considerable export growth and new employment. At the same time, the view that EPZs would spur broader economic development has not been borne out, as countries have often found it difficult to upgrade the activities in the EPZs to higher value-added enterprise, and spill-overs to economic activity outside the EPZs have been the exception rather than the norm.
