Creating Institutions within Institutions? Rethinking the Promise of Special Economic Zones in Ghana.

This paper examines whether Special Economic Zones (SEZs) create institutional environments distinct from the wider Ghanaian economy. Drawing on firm-level survey data from 325 enterprises, the study applies a quasi-experimental design combining Mahalanobis Distance Matching (MDM) and Inverse Probability of Treatment Weighting (IPTW) to estimate average treatment effects on treated firms and the full sample. The analysis evaluates three dimensions of the investment climate: institutional quality, onsite infrastructure and utilities, and offsite infrastructure and factor availability. Results suggest that SEZs provide firms with a somewhat more favourable business climate, most notably in strengthening investment protection. However, improvements in reducing regulatory burdens, corruption, and informal practices are less consistent, while infrastructural advantages, though evident, are not uniformly transformative.The study contributes original evidence from Sub-Saharan Africa, demonstrating the value of examining SEZs as differentiated institutional spaces rather than purely economic enclaves, and highlights their limited yet meaningful role in fostering institutional change.