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Special economic zones have received considerable
praise, partly because they offer favorable conditions for
investment-- mostly foreign--that is in turn believed to
nurture the industrial sector, help integrate national and
trans-national value chains, increase skilled employment,
and consequently, innovation. The conditions that
encourage the creation of special zones are the same
everywhere, and they fall into two categories: 1. Fiscal
conditions, with a variety of exemptions from costs
associated with production as well as salaries; and,
2. Administrative conditions, including strategies to
facilitate the zones’ internal functioning. Special zones
essentially represent legal extraterritorial regimes. The
1
steps taken by governments to support them are based
on policies that could be described as free-or even hyper-
free-market and that are part of broader patterns of
globalized exchanges and increasing social deregulation.

This situation has prevented new governments in
transition in Central Europe in the 1990s, as well as the
Mekong region in the 2000s, from implementing
protectionist policies. They differ considerably in this
respect from counter-part economies in Asia, Africa, and
Latin America that were able to implement what have
been called “developmentalist” policies over longer periods
in the wake of World War Two. Contemporary developing
countries lack a leisurely timeframe that would enable a
more gradual development process. Clearly, protectionist
policies would no longer be able to staunch investment
and financial flows particularly in an era in which supra-

1 « Special Economic Zones are geographically or functionally
limited parts of an economy in which rules & institutional settings
concerning the production and distribution of goods & services differ
from the rest of the economy », Ahrens et Meyer Baudeck