Export processing zones (EPZs) have a dual nature: they are both an administrative instrument for providing free-trade status to a nation’s manufactured exports as well as industrial parks specialized in manufacturing for export (World Bank, 1992). In the absence of an economy-wide, ‘market-friendly’ (World Bank, 1991) environment for growth — a favorable entrepreneurial climate, macroeconomic stability, extensive external links and broad state support for human capital and infrastructure — EPZs have been employed with varying success by less developed countries (LDCs), including several of the most protectionist, inward-oriented ones, as a selective policy tool in their attempts to earn foreign exchange, increase employment and ultimately induce industrialization. The use of EPZs to shift to a more open, competitive, free-trade strategy for growth and domestic development has been characterized as a ‘post-Listian’ breakthrough to the extent that it represents a radical departure from the restrictive strategy of import-substitution industrialization (ILO/UNCTC, 1988, p. 155). Perhaps the term ‘anti-Listian’ might be more appropriate to describe the 180-degree policy shift that the EPZ-assisted open border strategy of industrialization can represent.
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