Cost-Effectiveness of North Macedonia’s State Aid in Technological Industrial Development Zones

For a small and landlocked country like North Macedonia, trade integration is particularly important to sustain the country’s economic growth and transformation. Due to its relatively small domestic market, the economy of North Macedonia relies heavily on integration within the region and the global economy to continue to grow and benefit from foreign direct investment (FDI), technology flows, and global value chain (GVC) integration.

The World Bank has recently released the report Trade Policy Strategy 2.0 for North Macedonia: Trade Competitiveness Diagnostic and State Aid Effectiveness. It includes a chapter (Section 4) that evaluates the costs and benefits of state aid given to firms in North Macedonia’s Technological Industrial Development Zones (TIDZs). The analysis uses micro-level data and simulations to analyze the costs of tax exemptions offered to firms that joined the TIDZs.

Read the report here.