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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.”

Also listen to: Rob on The Good Life: Andrew Leigh in Conversation — on ‘making the most of your 80,000 hours’.

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.


If we look back at the last, the greatest humanitarian miracle in the post-war era has been China, which lifted about 800 million people out of poverty. What they did was urbanization combined with special economic zones. Starting with Hong Kong and Taiwan, they basically looked and said, “Wait, Hong Kong’s rich. Taiwan is rich. Their Chinese, we’re Chinese. Why are they doing well and we’re starving?” In 1980, they created four special economic zones. One was in Shenzhen. That was the biggest, the first year of its existence. A special economic zone in Shenzhen attracted over half of all foreign direct investment in all of China. This is a 30000-person fishing village attracting more foreign direct investment than a country with 700 million people.

That basically spread. These areas were successful. In 1984, they created some more. 1988, they created some more, until they basically spread throughout the entire country. Now, depending on what statistics you look, some 90% of China is a special economic zone. This strategy of governance reforms, combined with locating them in areas that don’t have a lot of political involvement, so you can get deeper reforms to test and basically to demonstrate their success is a proven, effective mechanism for such reforms that can then lead to changing the long term growth rate. Why is it an important problem? You still have billions of people living in poverty. To get them out of poverty and to change the growth rate, governance reforms is probably the single best way to do that. Charter cities are probably the best way to change the governance system in most of these countries.

I think it transcends traditional political divisions. For example, if you look at the right, which wants to restrict immigration, there’s obviously these massive benefits particularly to immigrants of more open borders. A lot of people on the right understand that there are these benefits, but are worried about maybe long-term institutional stability or impacts on wages on the lower-income spectrum. Charter cities, for them, basically provide a way for them to be like, “Oh, here’s a positive growth program for people in low-income countries.” At the same time, for people on the left, there has historically been this natural, I guess, more universalism. This natural interest in global poverty. I think charter cities, for them, offer a reasonably cost-effective mechanism that should be, in my opinion, at least part of a basket of approaches to help to lower global poverty.

The ideal country I think is about 1,000 to 5,000 per capita GDP. If it’s under 1000 it’s probably going to be a little bit too dysfunctional to be able to adopt. So well governed countries do not need charter cities because they’re already … there’s still some beneficial aspects that charter cities would provide, but they’re not as important. In poorly governed countries, it’s more urgent but then the fact that they’re figuring out how to walk this tight rope. How do you get a country that’s not very well governed to adopt this pocket of good governance. And that’s really the tightrope to walk that were doing a reasonable good job of walking and figuring out.

You look on the hill and you see specific offices that are very interested in tech policy. For example, Senator Mike Lee’s office, through the joint economic committee which it chairs, is very interested in reviving America’s tech policy. I’ve heard that Nancy Pelosi’s office is really interested in this as well. Marco Rubio’s office is really interested in industrial policy. I think it would be great if we could have a lot more people, a lot more young people, who are excited about the ideas, who believe in a positive vision of America and its potential. The potential of tech, and just generally, take a positive, long term view of the future of humanity. I think it would be really great to have a lot more of those people in Washington D.C.

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The 80,000 Hours Podcast features unusually in-depth conversations about the world's most pressing problems and how you can use your career to solve them. We invite guests pursuing a wide range of career paths — from academics and activists to entrepreneurs and policymakers — to analyse the case for and against working on different issues and which approaches are best for solving them.

The 80,000 Hours Podcast is produced and edited by Keiran Harris. Get in touch with feedback or guest suggestions by emailing [email protected].

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