MARCH 21, 2012 2:23PM

Paul Romer - Charter Cities

Rate: 3 Flag
We have seen extremely rapid diffusion of material culture. Think cell phones/Africa.  Africa was further away from effective wire based telecommunications 10 years ago than in the 1950's. Now, it has become irrelevent. 
So --- is it possible to transfer complex systems of rules without painstaking, and perhaps impossible, ground up, development?
Someone is asking this question right now.  


Charter Cities are a development strategy that is based on the success of Hong Kong and the Hanseatic League.  

The core idea is to establish autonomous cities that can adopt a stable, development/investment friendly legal, social, and political environment -- by simple copying.  

Hong Kong is a SAR (Special Administrative Region) of China and has retained British Common Law. 

Romer makes his case better than I can summarize it. 

I will point out that it is based on historical proof of concept.  Developing countries rapidly adopt technology from developed countries (for example, cell phones).  There is no inherent reason that they can't adopt different legal, social, and political institutions that are critical to development.

By early 2011, Romer was working with Honduras to implement his ideas.

 Stay tuned.  










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From an interview with Romer in Freakonomics...

"Romer resigned his tenured teaching position at Stanford to devote his full energies to the challenge."

"Yes, instead of being a professor, I’m now a senior fellow."

...meaning money for nothing except what he wants to do. What he really gave up was tenure, as if this extremely high-profile initiative wouldn't get him a job somewhere else if Stanford ever fired him.

"A charter city starts out as a city-sized piece of uninhabited territory."

Okay! In a country like Nigeria, where 90% of the people live on less than $2, and schools look like this, we will build a brand new city on bare ground!

"And who are you calling "we," white man?"

"Me and Halliburton."
We'll see how things work out in Honduras.

Voting with your feet is perhaps the ultimate democracy.
And, of course, people who have tenure @ Stanford generally don't need tenure at Stanford or anywhere, and vice versa.
"If we call your initiative "Colonialism 102," how is it different from Colonialism 101, Dr. Romer?"

"I'm glad you asked that question, Jakie, you moron from Hell! Fuck off!"

"In Colonialism 102, the Chinese own everything, instead of the British."

"Who said that? Shut up!"

"Because where else is the kind of money it takes to build cities going to come from, except from the National Bank of China, which absorbed about $300 billion from US consumers last year alone?"

Jakie throws the old Romer out a window and builds a brand new Dr. Romer on the bare stage

"But I still had to buy my magic powers with Chinese money!"

Fade to black.
But now that I followed Nick's link to the Economist, I see that Romer isn't really pushing Colonialism Redux! For example...

"For this reason he wants rich countries to oversee the administration of charter cities, in particular the judicial system and the police."

Wait, what?

He wants rich countries to oversee the administration of charter cities."

So it isn't like the whole country turns into a colony! Just the small part of it that functions beautifully, thanks to the administration of rich countries... the way the USA fixed Baghdad!
Jacob. Such a cynic.

Romer doesn't have a military. His scheme is, by necessity, voluntary.

He isn't shooting his way into Honduras. No one will be forced to move to a charter city.

It's a deal. They can either sell it and attract capital and inhabitants or not. The sovereign nations either sign up or not.

And presumably, they will use Europeans to run the places -- people who believe in government. I don't see Rand Paul jumping in on this one.

Bagdad? Lets see -- we bombed our way in, 1/2 destroyed the place, decided to nation build using US Military and a civilian administration that didn't believe in government.
I'd need to think about this a lot more but it just seems, at first glance, like another form of "invasion" by wealthy countries of less well off countries. The assumption is that those countries which have a well developed industrial base are "doing it right" and those countries that have not become involved in this sort of industrial development are not.

Yet in a world where care of the environment is becoming of major concern, those non-industrial nations might well be seen to be the one who have done it "right."

I'm not sure I like all the implications of this idea. Much was unsaid that needs to be spoken of.
I read the interview in Freakonomics and for me the jury's still out. It sounds like the debate/war over Charter Schools on a macro level. So far research has not shown them to be producing any better results than public schools--time will tell, I guess.