When Governments Suspend Their Own Rules: New at Reason

All over the world, in carefully delimited areas, governments have carved out exceptions to their own rules. These special economic zones, better known as SEZs, come in many sizes and types, ranging from simple duty-free warehouses to jurisdictions the size and complexity of entire cities. Host governments typically roll back taxes, customs, and similar barriers to trade in their zones, but sometimes offer special labor, environmental, or financial regulations, too.

You probably live within a short drive of an SEZ: The United States has more than 400 of them, in the form of Foreign Trade Zones. Today most countries—about 75 percent—host SEZs of some sort. Worldwide, they number well over 4,000, and if you count micro-zones, some of them no bigger than parts of buildings, over 10,000, writes Tom W. Bell.

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