Enterprise Zones/ Do they create or transfer value?

Abstract

This paper considers whether any lessons have been learnt from the Enterprise Zones (EZs) of the 1980s and whether providing economic stimuli creates, distorts or simply transfers value. Key issues include/—How do the 2011 EZs differ from their 1980s predecessors?—Land value as a residual, determined by the economic activity that can take place on a plot of land; therefore bestowing economic advantages selectively will distort land values.—Enterprise Zones will undoubtedly cause the displacement of existing jobs to more economically marginal areas.—Previous attempts at creating areas which enjoy economic advantages include Regional Development Agencies and Freeports; this paper examines what lessons, if any, can be learned from these that could be applied to EZs.—Could EZ benefits be applied across the entire UK?—The benefits of the 1980s EZs were largely captured by property and land owners rather than local businesses; who will receive the benefits from the current generation of EZs?—Jobs are as likely to be generated in the retail sector as the manufacturing sector; does this matter?—The success of the London Docklands Enterprise Zone can largely be attributed to improved transport infrastructure; such transport proposals are missing from the current proposals.