Bangladesh has been planning to establish 100 SEZs in next 15 years. Generally, itis believed that Special Economic Zones will attract FDI and develop the host country.We intend to find some concrete evidence to evaluate the decisions taken by Bangladeshregarding establishing SEZs. We used instrumental variables expressing the growth ofEPZs (main form of SEZ in Bangladesh) to find relationship of those variables with FDI.Our Granger Causality analysis with instrumental variables proves SEZs have causalrelationship with FDI. But our graphical analysis shows that most of the FDI is going tothe non-SEZ sectors. This proves that our SEZs are not being able to accommodate theFDI coming in our country; hence we require more SEZs to attract more FDI. We haveconducted experimental analysis of the causality on other developing countries whichshows that many developing countries were not successful in reaping the benefit of SEZsas they lacked domestic backward linkages, skill transfer and innovation. These resultsare also consistent with literatures studied for this analysis. We provide evidence thatSEZs and favorable macroeconomic condition cause FDI inflow. Hence, our researchyields the recommendation that Bangladesh should restructure its rules and regulationsregarding SEZs so as to foster inward linkages, increase domestic capabilities, arrangeefficient technology transfer, improve labor skills and ensure strict government taxmanagement.