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Formation of SEZ, Agricultural Productivity and Urban Unemployment

Sarbajit Chaudhuri () and Shigemi Yabuuchi

MPRA Paper from University Library of Munich, Germany

Abstract: Formation of SEZ using agricultural land to promote industrialization has recently been one of most controversial policy issues in many developing economies including India. This paper critically theoretically evaluates the consequences of this policy in terms of a three-sector Harris-Todaro type general equilibrium model reasonable for a developing economy. It finds that agriculture and SEZ can grow simultaneously provided the government spends more than a critical amount on irrigation projects and other infrastructural development designed for improving the efficiency of land. Agricultural wage and aggregate employment in the economy may also improve.

Keywords: Special economic zone; fiscal concessions; agricultural productivity; rural wage; urban unemployment (search for similar items in EconPapers)
JEL-codes: R14 H54 R13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-cwa, nep-eff, nep-geo and nep-lab
Date: 2007-10-11
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