Special Economic Zones

Special Economic Zones (SEZs) are areas within nation-states where different rules and regulations apply in some areas. These zones are usually tailored toward business, manufacturing, or enabling easy imports and exports. Since the mid-20th century, they have become a popular choice for governments to boost regional economic growth without the need for country-wide changes or controversial reforms.

While SEZs usually feature lower business taxes, exemptions from tariffs and other fees, and a simplified pro-business regulatory environment, they typically do not have regulatory autonomy. This means that while they are free to manage their own internal affairs to some extent, they cannot choose the regulations that will apply within them and are governed by pre-set legislation established by the national government.

There are now perhaps over six thousand SEZs worldwide, depending on the exact definition. Though they are self-governing to some extent and are in some respects freer than the rest of their nation-state, they either have little to no population, or the concessions within them are limited to businesses. While SEZs are in one way a precursor to some modern-day Free Cities, they cannot really be described as Free Cities themselves.