ABSTRACT
The Dominican Republic has been described as an SEZ success story, with zones that have attracted investments and encouraged exports. After the first SEZ opened in 1969, the scheme initially grew slowly. By 1985, the Dominican Republic hosted only four SEZs, with 31,000 workers in 136 firms in total. The knowledge problem has not manifested itself as much in the Dominican Republic as it did in the more centralized system of India. The differences between private and public zones in the Dominican Republic illustrate the different incentives of companies and public authorities. Around 2007-8, the Dominican government offered subsidized loans to textile companies in SEZs and wage subsidies to all SEZ firms. The incentive for the Dominican government, meanwhile, is to keep the new status quo. Current administrations are still balancing the interests of import-substituting firms and the exporting sector. The SEZ investors already have the market access and fiscal benefits they want.
