Rothenberg Speaks With VoxDev About His Research on Special Economic Zones in Indonesia

February 20, 2026

VoxDev

Alexander Rothenberg

Economics Department

International Relations Undergraduate Program

Center for Policy Research

Economic Policy

Oceania

Southeast Asia

Taxation

VoxDev

Alexander Rothenberg

Special economic zones (SEZs) are designated areas where governments concentrate favorable economic conditions to attract investment, create jobs, and boost exports and growth. First developed in Ireland in the late 1950s and popularized after China adopted the policy in the 1980s, there are now over 7,000 SEZs worldwide, including in 47 African countries,

In a recent episode of VoxDev's Economics Unpacked, Alex Rothenberg, associate professor of economics, discusses his research findings on whether SEZs shift workers into better-paid manufacturing jobs—and whether those benefits spread more widely across the economy.

“When we look at the effects of the [Indonesia's Integrated Development Zone] program on a variety of different measures—things like average wages in a district, employment rates, population growth, migration, consumption expenditures, poverty—we really find no difference in those outcomes and the changes of those outcomes between the districts that were affected by the program compared to the districts that weren't,” says Rothenberg.

“We find that the program was not successful and we find that it really didn't lead to any growth and welfare effects nationwide,” he says.

Rothenberg's study “When regional policies fail: An evaluation of Indonesia’s Integrated Economic Development Zones,” was published in the Journal of Development Economics.