ROLE OF THE GOVERNMENT IN THE DEVELOPMENT OF SPECIAL ECONOMIC ZONES AND INDUSTRIAL PARKS IN RUSSIA

This paper investigates the process of developing and implementing special economic zones (SEZs) and industrial parks (IPs) in Russia. Russian government used these initiatives to develop and diversify exports, increase employment, attract foreign direct investment (FDI), and launch technology and knowledge sharing processes. The neoclassical approach, political economy approach, heterodox school, and industrial cluster model have been relied on to evaluate the role of the state in the implementation of these initiatives and identify essential factors for sustainable development. This study reveals that government approach in developing SEZs and IPs implied high state interference into the business processes preventing healthy competition and collaboration within the economic zones. Also, lack of funding, political instability and overall business uncertainty were the main prevent factors for the sustainable growth of the economic zones. The paper suggests that for the development of SEZs and IPs in the Russian context, the important factors are personal networks between private investors, regional managers and federal government, as well as appropriate state regulations and general investment climate of the country.