Lessons from East Asia: comparing Ethiopia and Vietnam's early-stage special economic zone development

This paper compares how Ethiopia and Vietnam, two rising stars actively employing industrial policies as catalysts of structural change, have learned from East Asian countries’ experiences in developing their own special economic zones (SEZs). Based on an extensive literature review, a comparative case study of four SEZs, and interviews with key stakeholders involved in early SEZ development in the two countries, I found that SEZ policy learning was largely driven by each nation’s domestic economic reform. Policymakers in Ethiopia and Vietnam actively visited successful SEZs around the world, particularly those in East Asia. A Chinese and a Taiwanese overseas SEZ were the first SEZs developed respectively in Ethiopia and Vietnam, which provided eye-opening lessons for domestic policymakers on how to better improve the legal and institutional framework, infrastructure, and administrative services needed for SEZ development. Overall, however, one of the biggest obstacles facing Ethiopia and Vietnam in learning from China’s experiences is the lack of local autonomy given to SEZs in their own administration.