Tuesday, May 17, 2011

Charter cities and colonialism

Growth is very unequal across the world. In some areas, the experience has been very frustrating, foremost in Africa, others have been booming, foremost dense areas like Singapore, Hong Kong, or Taiwan. From there, growth has spilled over to neighboring areas, the best example being Guangzhou next to Hong Kong. These areas all have in common that they are autonomous from the surrounding areas, either by history or by design. This has lead Paul Romer to push for charter cities as a new development concept in other areas: give a preferably coastal city autonomy from the rest of the state in its management, allow it to trade freely in goods with the rest of the world, and allow free movement of people. As these charter cities grow, they will eventually help the backcountry to grow as well.

This idea is met by some resistance, though. One is that this is once more the people from the North trying to impose a radical change in the way business is done. This sounds like colonialism all over again, but as Voxi Heinrich Amavilah points out, the concept of charter cities is precisely about imposing anything, letting the locals run the show as they wish. Also, the rents from trade remain local, as the locals are free to trade, whereas under colonization foreigners took the rents. I think the idea has merit, especially for areas where a failed state is a major impediment to progress.

1 comment:

Anonymous said...

A good application would be to let highly skilled Japanese currently affected by the earthquake and tsunami to migrate voluntarily with the option of returning home when conditions normalize. They can start a new city, and transfer ideas that way. The rules that have kept highly qualified individuals is places like refuge camps where their productivity is constrained are archaic.