Bulca, Ferzan "Enterprise Zones: Policy Analysis"

The ever increasing rates of urban unemployment and related economic, social and political problems, together with the physical decay of inner cities, have attracted the attention of both the U.S. and the U.K. governments for more than two decades, and finally brought forward the Enterprise Zone program in both countries. The program was introduced as a free market strategy to create jobs through the promotion of new firm formation and the attraction of industries into inner cities. As such it aimed to reduce state intervention in the form of social expenses, social capital investments, and regulations.

This study analyses the theory and practice of the EZ program in both countries. The thesis advanced is that the EZ policy did not and could not achieve its stated goals. This thesis is argued within the framework of a theory of the dynamics 'of advanced capitalist economies.

On the basis of this conceptual framework, this study argues that the EZ concept and associated programs were based on a misconception of advanced capitalist economic systems and the role of the capitalist state. The assumptions and the expectations of EZs are found to be incompatible with the dynamics of advanced capitalism. While this provides a partial explanation of why the EZ program has diverged from its conceptual model in practice, it also explains its failure.

This conceptual evaluation of the EZ program is supported by a practical evaluation which indicates a failure of the implemented EZ programs in achieving their stated objectives. However, at the same time, with reference to the economic and political dynamics of advanced capitalist systems, it is argued that the EZ program would have failed everywhere even it had been fully implemented.

The general conclusion is that the EZs have been an unsuccessful experiment in terms of policy objectives. Further, it is suggested that the Us have been ideological in design rather than being a program based on a realistic comprehension of job creation potentials of the economy.

In both countries the EZ programs turned out to be similar to past planning experiences.

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This document was last modified on February 15, 2001.