The Chu Lai Open Economic Zone and Rural Development: Central Planning’s Laboratory for Policy and Institutional Innovation

The Chu Lai Open Economic Zone and Rural Development: Central Planning’s Laboratory for Policy and Institutional Innovation

June 14, 2013

This paper examines the experience of the Chu Lai Open Economic Zone in Quang Nam province to distill some lessons about the performance of EPZs as a policy instrument to stimulate rural development.

The paper argues that local officials have invested too much time and money in the attempt to attract foreign investors rather than concentrating on the domestic private sector. Although foreign investment is desirable, Quang Nam is more likely to emerge as a domestic business hub rather than a production location for major multinational  corporations.  Local  government  should  focus  on  the essential  task  of  helping  the  domestic private sector gain legal and affordable access to land and capital. In addition, the authors recommend further decentralization of authority to local government to enable Chu Lai to engage in policy experiments without the prior approval of central government authorities.

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