Free economic zones in the former USSR and the RSFSR during the Perestroika and post-Perestroika period of economic reform

Soviet economists first became interested in the concept of Export Processing Zones in their search for a means to facilitate foreign investment in their economy. The Russian conception, most commonly expressed as Free Economic Zones (FEZs), was rapidly viewed as a "pre-market mechanism" that would serve to enhance economic growth, expand foreign economic relations and facilitate the transition to a market economy. This thesis examines the FEZ'S from a Soviet/Russian perspective, utilizing primary Russian sources, in an attempt to determine possible reasons for the failure of the zones to progress as originally conceived. To accomplish this, a political-economy approach is employed to analyze the key issues underlying the adoption and adaptation of the FEZ concept, as well as the areas of greatest contention surrounding the establishment of the zones in the former USSR. It is concluded that the FEZ reform effectively remained stuck in the planning stages for a number of inter-related factors. The failure of the central authorities to reach a consensus on the form and functioning of the zones in their country inhibited attempts to produce clear and comprehensive legislation. As was the case with many other reforms of the period, the ongoing struggles between diverse political, economic, ideological and national/ethnic interest groups greatly influenced the way in which the zone concept evolved. These conflicts, together with the resulting rapid pace of reforms and events, played a large role in the ultimate failure of the zones to move far past the planning stages.