Luring,learning, and lobbying: The limits to capital mobility in the Dominican Republic

While Third World governments are advised and expected to establish their export processing zones (EPZs) near low-cost labor markets and modern transportation centers, the Dominican Republic’s oldest and most successful zones are located in the country’s relatively remote, high-cost interior. In this article I use qualitative and quantitative data: first, to explain the seemingly irrational EPZ location decision; second, to account for the seemingly paradoxical success of the country’s relatively high-cost secondary city EPZs; and third, to explore the puzzle’s implications for debates on industrial location, globalization, and the political economy of development policy. Andrew Schrank is an assistant professor of sociology at Yale University. He is currently completing a book on export diversification in the Dominican Republic. He is also collaborating on projects on the software industry in Mexico and a study of intellectual property rights in cross-national perspective. I would like to thank Stephen Bunker, Lawrence King, Marcus Kurtz, Denis O’Hearn, Kenneth Shadlen, members of the University of Chicago’s “Organizations and State-Building” workshop, participants in the Social Science Research Council’s “Rethinking Social Science Research on the Developing World” conference, and SCID’s reviewers for helpful comments. The research was undertaken with the assistance of the Institute of International Education.