Paul Romer’s radical idea: Charter cities

How can a struggling country break out of poverty if it’s trapped in a system of bad rules? Economist Paul Romer unveils a bold idea: “charter cities,” city-scale administrative zones governed by a coalition of nations. (Could Guantánamo Bay become the next Hong Kong?)

Paul Romer is developing a radical new model of growth and governance, which calls for the establishment of city-scale special administrative zones.

Stanford economist Paul Romer believes in the power of ideas. He first studied how to speed up the discovery and implementation of new technologies. But to address the big problems we’ll face this century — insecurity, harm to the environment, global poverty — new technologies will not be enough. We must also speed up the discovery and implementation of new rules, of new ideas about how people interact.

Throughout human history, big improvements in systems of rules took place when new governments entered the scene. In today’s world, this process has been largely shut down. To bring it back to life, Romer proposes that we create new cities where people can go to escape from bad rules and opt in to new and better ones. With better rules, people can be safe, self-interest can protect the environment, and investment can bring families all the resources that the modern world has to offer.

“Paul Romer has had a massive and profound impact on modern economic thinking and policymaking. … [His work] transforms economics from a ‘dismal science’ that describes a world of scarcity and diminishing returns into a discipline that reveals a path toward constant improvement and unlimited potential. Ideas, in Romer’s formulation, really do have consequences. Big ones.” -ReasonOnline

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