What China did was urbanization combined with special economic zones. They looked and said, “Wait, Hong Kong’s rich. Taiwan is rich. They’re Chinese, we’re Chinese. Why are they doing well and we’re starving?
Dr Mark Lutter
Governance matters. Policy change quickly took China from famine to fortune; Singapore from swamps to skyscrapers; and Hong Kong from fishing village to financial centre. Unfortunately, many governments are hard to reform and — to put it mildly — it’s not easy to found a new country.
This has prompted poverty-fighters and political dreamers to look for creative ways to get new and better ‘pseudo-countries’ off the ground. The poor could then voluntarily migrate to in search of security and prosperity. And innovators would be free to experiment with new political and legal systems without having to impose their ideas on existing jurisdictions.
The ‘seasteading movement’ imagined founding new self-governing cities on the sea, but obvious challenges have kept that one on the drawing board. Nobel Prize winner and World Bank President Paul Romer suggested ‘charter cities’, where a host country would volunteer for another country with better legal institutions to effectively govern some of its territory. But that idea too ran aground for political, practical and personal reasons.
Now Dr Mark Lutter and Tamara Winter, of The Center for Innovative Governance Research (CIGR), are reviving the idea of ‘charter cities’, with some modifications. Gone is the idea of transferring sovereignty. Instead these cities would look more like the ‘special economic zones’ that worked miracles for Taiwan and China among others. But rather than keep the rest of the country’s rules with a few pieces removed, they hope to start from scratch, opting in to the laws they want to keep, in order to leap forward to “best practices in commercial law.”
The project has quickly gotten attention, with Mark and Tamara receiving funding from Tyler Cowen’s Emergent Ventures (discussed in episode 45) and winning a Pioneer tournament.
Starting afresh with a new city makes it possible to clear away thousands of harmful rules without having to fight each of the thousands of interest groups that will viciously defend their privileges. Initially the city can fund infrastructure and public services by gradually selling off its land, which appreciates as the city flourishes. And with 40 million people relocating to cities every year, there are plenty of prospective migrants.
CIGR is fleshing out how these arrangements would work, advocating for them, and developing supporting services that make it easier for any jurisdiction to implement. They’re currently in the process of influencing a new prospective satellite city in Zambia.
Of course, one can raise many criticisms of this idea: Is it likely to be taken up? Is CIGR really doing the right things to make it happen? Will it really reduce poverty if it is?
We discuss those questions, as well as:
- How did Mark get a new organisation off the ground, with fundraising and other staff?
- What made China’s ‘special economic zones’ so successful?
- What are the biggest challenges in getting new cities off the ground?
- What are the top criticisms of charter cities, and why aren’t they worried?
- How did Mark find and hire Tamara? How did he know this was a good idea?
- Who do they need to talk to to make charter cities happen?
- How does their idea fit into the broader story of governance innovation?
- Should people care about this idea if they aren’t focussed on tackling poverty?
- Why aren’t people already doing this?
- Why does Tamara support more people starting families?
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The 80,000 Hours Podcast is produced by Keiran Harris.