PEDL Synthesis Paper Series

PEDL Synthesis Paper No. 1 | Special Economic Zones: Lessons from the Global Experience

Special economic zones (SEZs) or industrial parks can be an effective instrument to promote industrialization and structural transformation, but only when implemented properly in the right context. More than 50 years of experience with special export zones yields a mixed picture. There are notable successes, particularly in Asia and Latin America, and disappointments, more common in Sub Saharan Africa. This uneven record fuels a debate about the rationale and justification for using SEZs as an instrument for economic development. What are the global lessons from the use of SEZs in the broader effort to achieve structural transformation? Are the zones effective in promoting private-sector development? What are the risks of promoting SEZs in low-income countries, and what strategies will enable developing countries to minimise those risks and harness the power of SEZs to stimulate growth? This paper by Douglas Zhihua Zeng (2016) addresses these questions, and sheds light on the key issues for policymakers in developing countries.


PEDL Synthesis Paper No. 2 | Chinese Investment in Africa: How Much do we Know?

There is a widespread belief that China plays a fundamental role in African economies, but few rigorous empirical studies to back up this view. Many reports describe China’s engagement with Africa as “neoimperialism” and “authoritarian capitalism”, exploiting natural resources and local labour while undermining democracy. A growing demand for natural resources in China is also credited with boosting growth across the continent, especially in Africa’s resource-rich countries. In this paper, Brautigam, Diao, McMillan and Silver (2017) present a more balanced and data-driven view on what we know about Chinese investment in Africa and what it means for growth. They use official Chinese data to examine the patterns of Chinese engagement in Africa for the period 1998 to 2015. Importantly, these data show large gaps between planned and realised investment. The authors distinguish between these, and focus only on realised investments. The data indicate that China’s influence in Africa is much smaller than is generally believed, though its engagement on the continent is increasing. Chinese investment in Africa, while less extensive than often assumed, has the potential to generate jobs and development on the continent.


PEDL Synthesis Paper No. 3 | Eight Things Development Professionals Should Know about Foreign Direct Investment

Although global flows of foreign direct investment (FDI) have not recovered since the 2008 financial crisis, flows to developing countries have continued to register a very modest growth. But what is the impact of these FDI inflows on the recipient developing economies? This paper reviews the existing evidence to produce eight messages that could help development professionals understand the implications of FDI inflows for developing countries.


PEDL Synthesis Paper No. 4 | Microentrepreneurship in Developing Countries

This paper reviews the recent literature in economics on small-scale entrepreneurship (“microentrepreneurship”) in low-income countries. Major themes in the literature include the determinants and consequences of joining the formal sector; the impacts of access to credit and other financial services; the impacts of business training; barriers to hiring; and the distinction between self-employment by necessity and self-employment as a calling. The paper devotes special attention to unique issues that arise with female entrepreneurship.


PEDL Synthesis Paper No.5 | Firm-Level Upgrading in Developing Countries

In principle, firms in developing countries benefit from the fact that advanced technologies and products have already been developed in industrialized countries and can simply be adopted, a process often referred to as industrial upgrading. But for many firms, this advantage has remained elusive. What is getting in the way? This paper reviews recent firm-level empirical research on the determinants of upgrading in developing countries. The first part focuses on how to define and measure various dimensions of upgrading — increases in productivity, quality improvements, technology adoption, and expansions of product scope, among others. The second part takes stock of recent empirical evidence on the drivers of upgrading, classifying them as output-side drivers, input-side drivers, or drivers of firm capabilities. The review concludes with some thoughts about promising directions for future research in the area.