Refugee special economic zones

Lotta Moberg (William Blair, Chicago, Illinois, USA)
Sebastian Reil (Peking University, Beijing, China)

Journal of Entrepreneurship and Public Policy

ISSN: 2045-2101

Publication date: 3 September 2018

Abstract

Purpose

The purpose of this paper is to show how special economic zones (SEZs) can be applied to refugee camps. Zones are powerful tools for investors to act like institutional entrepreneurs, who promote institutional reform by pursuing exemptions from government constraints and taxes or by advocating for reform. Refugee SEZs (R-SEZs) would similarly allow for institutional entrepreneurs to promote broader immigration reform.

Design/methodology/approach

The authors apply a political economy framework to R-SEZs that explores the factors that make them feasible. A mathematical model is applied to explicitly define the conditions under which the zones could succeed in benefiting refugees, investors and the host economy alike.

Findings

Under certain conditions, appropriate tax rates can be applied to R-SEZs that make them feasible. Feasibility is determined by being beneficial for the host country while also attracting investors. The zones are feasible if they attract enough foreign investors as opposed to domestic investors. Other factors contributing to zone success are higher wages outside the zone, lower wages inside it, higher cost to the government of non-employed refugees, lower relocation cost for businesses and a higher tax rate outside the zone.

Practical implications

This policy would aim to provide job opportunities to refugees, profit opportunities to investors and lower net costs for the host government. R-SEZs should be considered by policy makers in countries hosting refugee camps. Just like the old model of SEZs, they can benefit workers while also enhancing the government’s budget.

Social implications

R-SEZs have the potential to alleviate the refugee crisis the world is facing, which is arguably one of the largest social challenges of our time.

Originality/value

This paper is the first to outline the political economy conditions for SEZs applied to refugee camps.

Keywords

Citation

Lotta Moberg and Sebastian Reil (2018) "Refugee special economic zones", Journal of Entrepreneurship and Public Policy, Vol. 7 No. 3, pp. 290-303

Download as .RIS

DOI

: https://doi.org/10.1108/JEPP-D-18-00030

Publisher

:

Emerald Publishing Limited

Copyright © 2018, Emerald Publishing Limited

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