Dobronogov, AntonFarole, Thomas2012-03-192012-03-192012-02-01https://hdl.handle.net/10986/3253Integration in the East African Community offers significant opportunities not only to expand trade among member states, but more importantly to scale up regional production to take advantage of much larger global market opportunities. Special economic zones are a potentially valuable instrument to facilitate the integration of regional value chains in support of this scaling up. They also have the potential to deliver powerful demonstration effects on the benefits of integration and to help entrench the integration process. This paper discusses the proposal for developing an "economic integration zone" in the East African Community. The benefits of such a zone could be substantial, as would be the practical challenges to implementation -- in particular the political economy challenges. However, a number of institutional and commercial solutions exist to address these challenges.CC BY 3.0 IGOAPPROPRIATIONSARBITRATIONAUTONOMYBANKING STABILITYBARRIERS TO INVESTMENTBENEFICIARIESCAPITAL MOBILITYCAPITAL OUTFLOWSCASH FLOWCOLLECTIVE ACTIONCOMMON MARKETCOMPARATIVE ADVANTAGESCOMPARATIVE ANALYSISCOMPETITIVE ADVANTAGECOMPETITIVE INVESTMENTCOMPETITIVENESSCORPORATE TAXCORPORATE TAXESCREDIBILITYCUSTOMS UNIONDECISION MAKINGDEMOCRACYDEMONSTRATION EFFECTSDEVELOPING COUNTRIESDEVELOPING COUNTRYDEVELOPMENT ASSISTANCEDEVELOPMENT BANKDEVELOPMENT POLICYDEVOLUTIONDISPUTE RESOLUTIONDIVESTMENTDOMESTIC ECONOMYDOMESTIC MARKETEAST AFRICAN DEVELOPMENT BANKECONOMIC CRISISECONOMIC DEVELOPMENTECONOMIC EFFICIENCYECONOMIC GEOGRAPHYECONOMIC GROWTHECONOMIC INTEGRATIONECONOMIC PERFORMANCEECONOMIC REFORMECONOMIC REFORMSEMERGING ECONOMIESEMPLOYMENTENFORCEMENT MECHANISMSEXCISE TAXESEXPENDITUREEXPORT GROWTHEXPORT PROCESSING ZONESEXPROPRIATIONEXTERNALITIESFINANCIAL INCENTIVESFINANCIAL SYSTEMFISCAL DISCIPLINEFIXED COSTSFOREIGN CURRENCYFOREIGN DIRECT INVESTMENTFOREIGN DIRECT INVESTORFOREIGN INVESTMENTFOREIGN INVESTORSFOREIGN TRADEGAME THEORYGDPGLOBAL EXPORTSGLOBAL MARKETGLOBAL MARKETSGOOD GOVERNANCEGOVERNMENT POLICIESGOVERNMENT POLICYGROWTH POTENTIALHOLDINGHOME COUNTRYHOST COUNTRIESHOST COUNTRYHOST GOVERNMENTHOST GOVERNMENTSHOUSINGINCOME LEVELSINCOME TAXINCOME TAXESINCOMESINDIVIDUAL FIRMSINDIVIDUAL INVESTORSINDUSTRIALIZATIONINFRASTRUCTURE DEVELOPMENTINFRASTRUCTURE INVESTMENTINFRASTRUCTURE INVESTMENTSINFRASTRUCTURE REQUIREMENTSINSTITUTIONAL ENVIRONMENTINSTITUTIONAL MODELSINSTRUMENTINSURANCEINTERNATIONAL BANKINTERNATIONAL BEST PRACTICEINTERNATIONAL INVESTMENTSINTERNATIONAL INVESTORSINTERNATIONAL LAWINTERNATIONAL MARKETSINTERNATIONAL STANDARDSINTERNATIONAL TRADEINVESTMENT ACTIVITYINVESTMENT CLIMATEINVESTMENT RISKJOB CREATIONJOINT VENTUREJUDICIAL SYSTEMJURISDICTIONLABOR MARKETLABOR MARKETSLAND PRICESLAND VALUELAND VALUESLAWSLEGAL AUTHORITYLEGAL CONSTRAINTSLEGAL FRAMEWORKLEGISLATIONLEVIESLEVYLICENSESLOCAL ADMINISTRATIONLOCAL GOVERNMENTLOCAL GOVERNMENTSLOCAL TAXESMARKET ECONOMIESMARKET ECONOMYMARKET INTEGRATIONMARKET REGULATIONMUNICIPAL GOVERNMENTMUNICIPAL GOVERNMENTSNATIONAL ECONOMYNATIONAL GOVERNMENTSNATURAL RESOURCENATURAL RESOURCESOPPORTUNITY COSTSPERSONAL INCOMEPERSONAL INCOME TAXESPOLITICAL CONSIDERATIONSPOLITICAL ECONOMYPOLITICAL REGIMESPOLITICAL RISKPOLITICAL RISK INSURANCEPOLITICAL RISKSPOTENTIAL INVESTORSPRIVATE INVESTORPRIVATE MARKETSPRIVATE PARTIESPRIVATE SECTORPRIVATE SECTOR DEVELOPMENTPROPERTY RIGHTSPROVINCIAL GOVERNMENTSPROVISIONSPUBLICPUBLIC GOODPUBLIC GOODSPUBLIC SERVICEREAL ESTATERED TAPEREFERENDUMREGIONAL INTEGRATIONREGIONAL TRADEREGULATORREGULATORY AUTHORITYREGULATORY BODIESREMITTANCESREMOTE REGIONSREPUTATIONRETURNRETURNSREVENUE COLLECTIONREVENUE SHARINGRISK PREMIUMRISK PREMIUMSROADSRULE OF LAWSALES TAXESSETTLEMENTSHAREHOLDERSSINGLE MARKETSTATE OWNED ENTERPRISESSTRUCTURAL CHANGESTRUCTURE OF GOVERNANCESUNK COSTSSURCHARGESTARIFF BARRIERSTAXTAX REGIMETAX REGIMESTAX REVENUETAX REVENUESTELECOMMUNICATIONSTRACK RECORDTRADE BARRIERSTRADE FLOWSTRADE POLICIESTRANCHETRANSACTIONS COSTSTRANSPORTTREATIESTREATYWORLD ECONOMYWORLD MARKETWorld Bank10.1596/1813-9450-5967