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The success and failure of Russian SEZs: some policy lessons

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  • Alexey Kuznetsov
  • Olga Kuznetsova

Abstract

This paper examines the economic efficiency of Russian special economic zones (SEZs) established by federal authorities since 2005. The results are mixed: the payback of SEZs is low, but they continue to attract residents; SEZs have greater attractiveness for foreign investment, but their sectoral structure is fundamentally no better than the country-wide structure; SEZs’ enterprises have higher labour productivity than the country, but mainly owing to their recent creation. The common bottlenecks of SEZ development are the instability of legislation on SEZs, the low level of federal authorities’ activity in SEZ development before the economic crisis, competition with other preferential regimes for investors and the long period of searching for the optimal system of SEZ management. Differences in the efficiency of particular SEZs are explained by the peculiarities of the territories where SEZs are established. SEZs are successful if they are created on sites that enjoy a favourable geographic position and in regions that have advanced levels of industrial development.

Suggested Citation

  • 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.
    • Handle: RePEc:unc:tncjou:6
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    References listed on IDEAS

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    1. 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.
    2. Susanne A. Frick & Andrés Rodríguez-Pose & Michael Wong, 2018. "Towards economically dynamic Special Economic Zones in emerging countries," Papers in Evolutionary Economic Geography (PEEG) 1816, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Apr 2018.
    3. K. V. Yankov & A. K. Moiseev & D. A. Efgrafov, 2016. "Problems and prospects of special economic zones in Russia," Studies on Russian Economic Development, Springer, vol. 27(3), pages 311-317, May.
    4. Ichiro Iwasaki & Keiko Suganuma, 2005. "Regional Distribution of Foreign Direct Investment in Russia," Post-Communist Economies, Taylor & Francis Journals, vol. 17(2), pages 153-172.
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    Cited by:

    1. Roseline T. Karambakuwa & Ronney M. Ncwadi & Weliswa Matekenya & Leward Jeke & Syden Mishi, 2020. "Special economic zones and transnational zones as tools for Southern Africa's growth: Lessons from international best practices," WIDER Working Paper Series wp-2020-170, World Institute for Development Economic Research (UNU-WIDER).
    2. Andrés Rodríguez‐Pose & Federico Bartalucci & Susanne A. Frick & Amelia U. Santos‐Paulino & Richard Bolwijn, 2022. "The challenge of developing special economic zones in Africa: Evidence and lessons learnt," Regional Science Policy & Practice, Wiley Blackwell, vol. 14(2), pages 456-481, April.
    3. Rajneesh Narula & James X. Zhan, . "Using special economic zones to facilitate development: policy implications," UNCTAD Transnational Corporations Journal, United Nations Conference on Trade and Development.
    4. Simola, Heli, 2021. "Long-term challenges to Russian economic policy," BOFIT Policy Briefs 11/2021, Bank of Finland Institute for Emerging Economies (BOFIT).

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