The paper first reviews the global literature on SEZs and the history of SEZs in the GMS, with emphasis on particular features of border SEZs when two bordering countries have differing sources of comparative advantage. It also contains an in-depth analysis of Mae Sot, part of the Tak SEZ in Thailand close to the Myanmar border, utilizing a customized survey of 100 firms. Further empirical evidence is provided on the effectiveness of SEZs based on the extensive literature about and ADB site visits to SEZs in Savannakhet Province in the Lao People’s Democratic Republic (Lao PDR) and a bespoke client survey by ANZ Bank of firms in Cambodia, the Lao PDR, Myanmar, Thailand, and Viet Nam. The paper brings together the wider literature and the GMS evidence to assess the arguments and modalities for harnessing SEZs for border development. The report concludes with policy recommendations for GMS ministers on whether and how SEZs generally, as well as specifically at the borders, can build up competitiveness of economic corridors and promote economic development.

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