become operational or failed to attract demand. Yet a glance at pipelines of development programs across continents finds no slackening in the creation of new industrial park programs.<sup>8</sup> Since the available evidence strongly suggests this will continue, there are likely more gains in understanding how and why park programs do or do not deliver than in attempting to frame a general law of their merits.

These general characteristics apply strongly to the Indian context. For decades state-level industrial development corporations have been building industrial parks. At the center, multiple ministries and plan periods have framed new industrial park schemes. The most visible recent attempt was the SEZ program, launched in 2005, which stumbled in implementation.<sup>9</sup> Many examples of successful parks have been built in India, through both center and state initiatives, but the overall record is decidedly mixed, and timelines tend to be long and lengthening (as will be described in more detail below).<sup>10</sup> Several factors are often posited to explain the failures of industrial park programs. Some are highly specific, such as the threat of conflict, but most are broad, for example, poor sector targeting; poor location choice; insufficient investment in infrastructure; poor implementation capacity and lack of authority; and lack of high-level support and stability.<sup>11</sup> When these are surmounted, or sidestepped, relative failure is also attributed to factors such as a lack of support for technology acquisition, skills building and quality assurance, or other actions that would generate “cluster effects”.<sup>12</sup> Such diagnostics focus on the absence of particular institutional _forms_ , rather than the _functions_ that should be served by the different stakeholders.<sup>13</sup> This runs this risk of building in “strong priors about the nature of the problem and the appropriate fixes”,<sup>14</sup> and can stand in the way of finding solutions in terms of _performance_ . We therefore find it more useful to classify implementation failures of industrial parks into four main performance categories:

- (i) the parks do not get built; (ii) the parks are built but there is little demand from firms to locate and invest in them;

- (iii) the parks are built and generate demand, but with few “cluster effects”;

- (iv) the parks are successful but have neutral or negative side-effects on investment climate outside the park (“negative spillovers” and “crowding out”).<sup>15</sup>

Two important points must be made on this classification. First, categories (i) and (ii) relate to performance failures in terms of _outputs_ , while (iii) and (iv) relate more to _outcomes_ . The underlying causes affecting park building (i) and investment attraction into them (ii) are very different from those affecting the development of clustering externalities (iii) on the one hand and the provision of local public goods (iv) on the other. It is still early stage for the scheme examined here to provide a formal

> 8 For example, in a recent analysis of the WB CI Practice affiliate’s desire for knowledge by topic, the largest unmet demand for knowledge related to parks and zones. The authors are personally aware of park programs recently formulated or in development in countries ranging from Ethiopia to Brazil to Myanmar to Afghanistan.

> 9 World Bank (2012), “Learning from SEZs in India”, Unpublished.

> 10 Farole, T.,, and Akinci, G., eds. (2011). Special Economic Zones: Progress, Emerging Challenges, and Future Directions. Washington, DC: The World Bank.

> 11 Dinh, H.T. et al. (2012). Light Manufacturing in Africa: Targeted Policies to Enhance Private Investment and Create Jobs. Africa Development Forum Series. Agence Française de Développement and The World Bank.

> 12 Zeng, D.Z. (2006). Knowledge, Technology and Cluster-based Growth in Africa: Findings from Eleven Case Studies of Enterprise Clusters in Africa. Knowledge for Development (K4D) Program, World Bank Institute, The `W orld B ank.`

> 13 Blum, J., Manning, N. & Srivastava, V. (2012). Public Sector Management Reform: Toward a Problem-Solving Approach. Economic Premise, Number 100, December 2012. The World Bank.

> 14 Rodrik, D. (2008). The New Development Economics: We Shall Experiment, but How Shall We Learn? Cambridge, MA: John F. Kennedy School of Government, Harvard University.

> 15 What we term “cluster effects” and “negative spillovers” are explained in detail in section IV.

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