(2009-07-30) Romer Charter Cities
Paul Romer gave a talk at TED-Global about his Charter City concept. The video is online now. He's trying to encourage creation of cities like Hong Kong and the Special Economic Zone-s in China. Urbanization without Slum creation? Trying to get Urban Design right in advance (Big Design Up Front)?
A specific example he pitches is having the US turn the Gitmo land (after closing the prison) over to the Canadians to have them develop/manage it (because they'd be seen as a reasonable Third Party). This interview gives a little more context for that idea. In poorer countries that don't have the same kind of credibility with international investors, a more interesting but controversial possibility is that two or more countries might sign a treaty specifying the charter for a new city and allocate between them responsibilities for administering different parts of the treaty... Investors from the rest of the world could finance the Infrastructure for a new city in exchange for fee income from users (hmm, local Monopoly creation? Company Town?) . Entrepreneurs and managers from the rest of the world might come and run the businesses that would hire millions of people. Many of these highly educated and experienced people might be emigres who left when the island turned to Communism. These investors and these potential residents will come only if you can promise them the protections afforded by the Rule Of Law. By yourself, with the Cuban institutions that you control, there is simply no way for you to make a credible binding commitment to the rule of law. You could simply change your mind later. More importantly, your successor, whomever that may be, might want to back out of any promises you make. The only way for you and your contemporaries to make a binding, long-term commitment is to sign a treaty with a country like Canada and to use it as a third-party guarantor. In effect, what a treaty lets you do is leverage the existing credibility of Canadian institutions and bring in the rule of law... In practice, countries around the world, even countries that can't get along, still respect treaties. Cuba respects the treaty with the United States, even as they complain bitterly about it.
A big question is whether these cities would provide Democracy. Romer says that's just one possible Game Rule. The political model in post-WWII Hong Kong under the British was one in which residents could not vote but administrators were accountable to voters who weren't residents. It was a very interesting hybrid, and very different from authoritarian rule. This model could work well in some situations. Imagine Shiite and Sunni immigrants living in a charter city administered by Canadians. The immigrants might prefer to have Canadian voters hold accountable the people who run the police rather than having political contests between the Sunni and Shiites to see who gets to be in charge. If the contests are local, this can be very destabilizing and can lead to ethnic cleaning of neighborhoods.
Is Dubai a good example?
Update: a good critique
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