A Follow-Up on the Economic Impact of Special Economic Zones in Honduras Can Honduran ZEDEs and “Growth Hubs” Leapfrog Institutional & Economic Development?

Abstract

This is a follow-up to a study, published in 2019, on the economic impact of so-called Zones for Economic Development (ZEDEs) in Honduras, a special type of special economic zone (SEZ). As the inner workings of the ZEDE have become clearer (especially with the recent launch of Honduras’ first ZEDE, Honduras Próspera) and its governance structure is now evident, its potential is reassessed. We review the new elements that have come to light over the past year, what their impact will be on the Honduran economy, and how this affects our initial projection of the ZEDE’s economic potential. We conclude that the Honduran ZEDE, although scarcely touted, could set a new standard for special economic zones not only in the Central American region, but in the world.