Tuesday, June 14, 2011

Charter Cities in the 21st Century?

Rules can oppress or invigorate. Consider a satellite image of lights on the Korean peninsula. Look at what years of oppressive rules have done to the north compared to the open society in the south.

My recent blogs on homelessness made me wonder if cities fail the homeless because of rules? Why can't they do better?

Paul Romer has a fascinating idea. He calls it the Charter City.

Charter Cities are reform zones where people can escape bad rules of today's cities and opt for a new kind of city with better rules. In his first TED.com talk he described charter cities as special administrative free-trade zones. They will be safer, environmentally friendly, and will contain all the needed resources for residents, especially the poor.

Romer is no woo-woo slouch. He's an economist who transformed growth theory in the 1980s. He's also senior fellow at Stanford's Institute for Economic Policy.

His idea behind Charter Cities is this: It is easier to start cities from scratch on vacant land rather than get bogged down by the oppressive political rules, legal traps, and special interest groups blocking progress in today's cities.

The City Journal says once a host government designates an uninhabited land area and establishes an independent charter, anyone can choose the rules of a charter city and move there.

The full idea is described on the Charter City website.

Apparently the idea is catching on.

This year the Honduras Congress adopted Romers idea and passed a constitutional amendment to create charter cities.

Will the rural poor move into these special economic zones and end up in 3rd-world styled sweat shops? Romer claims factory workers need not live in slums. Instead, Charter Cities will have laws to ensure proper utilities and decent low-cost housing.

Why not wait for technology to solve problems of poverty and pollution? Romer says new technology will come too late. Instead he says more relaxed rules and new ideas about how people interact will unleash creative potential. Creating independent and open cities allows that to happen.

Check out Romer's latest TED.com talk.

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