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The special economic zone in the Kaliningrad region: development tool or institutional trap?

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  • Timur Gareev

    (Immanuel Kant Baltic Federal University)

Abstract

In this paper we examine the special case of the “degenerated” Special Economic Zone (SEZ) in the Russian exclave on the Baltic Sea — the Kaliningrad region. The ‘compensation Vs. development’ policy dilemma associated with the SEZ in the exclave is elaborated using modified ERP and ETR techniques. Factual results and consequences of more than 20 years of ongoing SEZ institutional instability (a transitional shift from customs tariff to profit taxation preferences) are examined. We show how transfer pricing and formation of hybrid structures reinforce the import-substitution bias of exclave economics. Some concerns about the trade-off between stimulation policies and economic efficiency in the context of the SEZ are discussed.

Suggested Citation

  • Timur Gareev, 2013. "The special economic zone in the Kaliningrad region: development tool or institutional trap?," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 13(2), pages 111-127, December.
    • Handle: RePEc:bic:journl:v:13:y:2013:i:2:p:111-127
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    File URL: https://www.tandfonline.com/doi/epdf/10.1080/1406099X.2013.10840535
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    References listed on IDEAS

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    Cited by:

    1. Timur Gareev & Ksenia Voloshenko, 2015. "Features of Balance Model Development of Exclave Region," Economy of region, Centre for Economic Security, Institute of Economics of Ural Branch of Russian Academy of Sciences, vol. 1(2), pages 113-124.
    2. Hanna Godlewska-Majkowska & Agnieszka Komor & Magdalena Typa, 2016. "Special Economic Zones as Growth and Anti-growth Poles as Exemplified by Polish Regions," Entrepreneurial Business and Economics Review, Centre for Strategic and International Entrepreneurship at the Cracow University of Economics., vol. 4(4), pages 189-212.
    3. Alexey Kuznetsov & Olga Kuznetsova, . "The success and failure of Russian SEZs: some policy lessons," UNCTAD Transnational Corporations Journal, United Nations Conference on Trade and Development.
    4. Joanna Dziendziora & Małgorzata Smolarek & Barbara Piontek, 2021. "Activation of Investment Processes in the Context of Operation of Special Economic Zones in Poland," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 130-146.

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    More about this item

    Keywords

    Special economic zone; Kaliningrad exclave; regional economic policy; import-substitution; hybrid structures;
    All these keywords.

    JEL classification:

    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy
    • P33 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - International Trade, Finance, Investment, Relations, and Aid
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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