Special Economic Zones and Liberalization Avalanches

Journal of Entrepreneurship and Public Policy

34 Pages Posted: 12 Nov 2013 Last revised: 26 Jan 2021

See all articles by Lotta Moberg

Lotta Moberg

William Blair

Vlad Tarko

University of Arizona - Department of Political Economy and Moral Science

Date Written: January 25, 2021

Abstract

Special Economic Zones (SEZs) have been touted as “tools for development”. China in particular has become the beacon of SEZ success, as the zones have played an important role in the country-wide reform process. However, in many other cases, SEZs have failed. To understand when SEZs succeed and when they fail, we describe SEZs as a peculiar form of top-down decentralization, and develop a model of political entrepreneurship to explain under what conditions SEZs can be expected to help generate a transition from a rent-seeking society to a liberalized economy. This model builds on the Blanchard and Shleifer’s (2001) model to provide a better explanation for China’s success than the federalism model proposed by Weingast, Montinola, and Qian (1995).

Keywords: federalism, rent-seeking, economic reform, China, political entrepreneurship

JEL Classification: B52, O19, O24, O43, P26, P52

Suggested Citation

Moberg, Lotta and Tarko, Vlad, Special Economic Zones and Liberalization Avalanches (January 25, 2021). Journal of Entrepreneurship and Public Policy, Available at SSRN: https://ssrn.com/abstract=2352520 or http://dx.doi.org/10.2139/ssrn.2352520

Lotta Moberg (Contact Author)

William Blair ( email )

Chicago, IL
United States
+13123645011 (Phone)

HOME PAGE: http://https://www.williamblairfunds.com/macro/

Vlad Tarko

University of Arizona - Department of Political Economy and Moral Science ( email )

Tucson, AZ
United States

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