The economic theory of special jurisdictions and the possibilities of the Lithium Valley
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2025-01-01
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This article analyzes a theoretical case for cost-benefit analysis of a local elite accepting the implementation of a special jurisdiction (such as a Special Economic Zone or a Charter City), in which the choice is divided between benefiting from economic prosperity (through revenue) and rent-seeking. A brief economic diagnosis of entrepreneurship and employment is made for the Lithium Valley, a region located in the north of the state of Minas Gerais, to support a discussion based on evidence about the possible creation of a special jurisdiction in the region. The paper concludes that effective implementation of SEZs or similar jurisdictions could stimulate regional development by aligning elite incentives toward economic growth rather than rent-seeking. However, achieving long-term institutional transformation requires policies that foster externalities, improve governance, and align local elites' preferences with broader economic goals.
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SHIKIDA, C. D.; CHRISTO, I. G. C. The Economic theory of special jurisdictions and the possibilities of the Lithium Valley. Journal of Special Jurisdictions, v. 5, n. 1, p. 185-207, 2024.
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Journal of Special Jurisdictions, v. 5, n. 1, 2024