A panel data evaluation of Poland's regional policy
In this paper we evaluate in an ex-post perspective whether the special economic zones (SEZs) introduced in Poland in 1994 have been successful in meeting regional development objectives or what we in this paper identify as a particular policy that has changed from being supply- to demand-led in terms of who ended up adopting the policy. We evaluate the policy on as many of its objectives as possible: employment creation, business creation including attraction of foreign direct investment (FDI), income or wage effects and environmental sustainability. Our results indicate that SEZs in Poland have been successful on a number of its objectives such as in particular attraction of FDI and raising investment levels in disadvantaged regions at the outset of transition. The positive effect on business creation therefore mainly comes through FDI. In other areas such as in particular securing a higher income level and locking firms into the sustainability agenda through adoption of green technologies and reduced air pollution we find only a small positively moderating effect of the policy on what are traditional economically disadvantaged areas in Poland that were overtly dependent on the socialist production model. The main policy implication of the paper is that SEZs may very well be a successful strategy for regionalized reindustrialization, but the policy must be seen as one of necessary temporality and can therefore not stand alone. Before launching SEZs policy-makers must have in place plans for follow up measures to ensure the longer term competitiveness and sustainability implications of such an initiative.