Paul Romer launched the idea of charter cities with his now famous TED talk. Romer represents the mainstream, development economist, version of the idea. He unfortunately didn’t write much on charter cities. Here is the text of a speech he gave in Mexico. Here is an interview he gave on charter cities. Here is an Atlantic article detailing the idea and Romer’s attempt to create a charter city in Madagascar.
The roots of the idea come from several sources. Albert Hirschman wrote Exit, Voice, and Loyalty contrasting how responsive institutions, both states and firms, are to leaving (exit) or feedback (voice). Charles Tiebout launched formal study of inter jurisdictional competition with a single model. Spencer Heath and his grandson Spencer MacCallum developed early libertarian strands of the literature.
Special economic zones are, in some ways, the precursor of the idea of charter cities. The research hasn’t yet overlapped but is still worth familiarizing yourself with. The FIAS report is the best introduction. This World Bank book includes several insightful articles. This World Bank book gives a reasonably comprehensive overview. Lotta Moberg’s book presents a useful perspective on the political uses of special economic zones. The World Free Zone Organization is the most prominent industry group for special economic zones. Special economic zones remain under-researched.
The techno libertarians are another important strand of the conversation. The Seasteading Institute was launched to build floating, autonomous cities, and has served as a focal point. Blue Frontiers is a for-profit spin-off dedicated to building floating islands. Balaji Srinivasan gives a reasonably definitive techno libertarian approach to governance. Thousand Nations served as an important blog in the space. Marc Andreessen defined a zone-based approach to regulatory reforms. Tom Bell and Joe Quirk both wrote books in the techno libertarian tradition. The Patri Friedman Cato Unbound caused quite a stir in its day.
New cities, multi-billion-dollar real estate developments with hundreds of thousands of planned residents, remain relatively unknown. The New Cities Foundation held three conferences in the early 2010’s to bring such new cities together, though have since moved away from the space. Their conference reports are worth reading, here, here, and here. Sarah Moser’s lab out of McGill University continues the research. Nkwashi, a $1.5 billion-dollar new city project in Zambia, and Rendeavour, the largest urban developer in Africa are two of my favorite projects. I interview Mwiya Musokotwane, the developer of Nkwashi.
There is relatively little philosophical investigation into charter cities/innovative governance of which I’m aware. The definitive book is Liberal Archipelago by Chandran Kukathas, written in the philosophical treatise style of Anarchy, State, and Utopia by Nozick and Theory of Justice by Rawls. The tenth chapter of Anarchy, State, and Utopia does play with competing jurisdictions. Archipelago and Atomic Communitarianism gives a relatively short rationalist defense of small jurisdictions.
Honduran ZEDEs are worth understanding for their impact on the techno libertarian mindset. The legislation allows for zones with nearly complete legal autonomy in commercial law. Paul Romer was involved in the original legislation, but left on poor terms. A handful of libertarian companies have died in Honduras trying to create a charter city. Much ink has been spilled on the debate. The legislation remains on the books, but no charter city has been publicly launched. There are reasonably credible rumors of potential launches in the near future.
One Belt One Road (OBOR) is currently dominating the discussion. OBOR is the expansion of Chinese development policy, infrastructure, special economic zones, and urbanization, overseas. It is alternatively, China’s attempt to create a post-American order. Here are three central Asian One Belt One Road projects. Low returns are a challenge for OBOR. This section will go out of date very quickly.
Chinese special economic zones in some ways provide the template for innovative governance, decentralized political decision making and rapid urbanization. Shenzhen is a proto-charter city. Ronald Coase’s last book gives a good account of China’s growth. The Political Economy of China’s Special Economic Zones gives an early account. Special Economic Zones and the Economic Transition of China gives an updated version. This article is a good, short overview.
Singapore, Hong Kong, and Dubai, in addition to Shenzhen, provide templates for charter cities. The best book on Singapore is written by Lee Kuan Yew. Architect of Prosperity gives an account of Hong Kong’s transformation. City of Gold is a good history of Dubai and the UAE. Michael Strong’s account of the Dubai International Financial Center, which effectively imported common law, is worth reading.
Institutions are important to understand as context for charter cities. Douglass North remains underrated. Institutions and Violence and Social Orders are his two most important books. Here is a shorter article. Acemoglu and Robinson wrote an easy to read pop version of institutions. Hayek’s The Constitution of Liberty remains important. Deep roots literature exemplifies the some of the challenges of charter cities. Bill Easterly warns of the Tyranny of Experts.
Refugee cities, basically charter cities for refugees, enjoyed a brief moment. Two organizations, Refugee Cities and Refugee Nation, were launched with the goal of legal autonomy for refugees. Naguib Sawiris, an Egyptian billionaire offered to buy an island to house refugees. The Jordan Compact was developed and implemented with trade concessions in exchange for Jordan employing refugees in special economic zones. With Turkey limiting the refugee flow, the crisis has lost attention. However, there are groups working behind the scenes to make refugee cities possible.
The libertarian history of new countries is illuminating, mostly as lessons of what not to do. The Republic of Minerva and Operation Atlantis were both well-funded, ill-conceived, utopian visions. Successful institutional change requires allegiance with the ruling elite.
For fiction, Snow Crash by Neal Stephenson leads the list. Diamond Age and The Moon is a Harsh Mistress are also relevant. A Song of Ice and Fire, the book series which A Game of Thrones is based on, is an entertaining read for the power politics, as well as the existence of free cities like Bravos, and their interactions with Westeros.
Lastly, there is a long history of city states. The Hanseatic League is one of the most interesting political units, being a confederation of city states, though there has been little serious English scholarship on it. Henri Pirenne remains under rated. Venice and Genoa were city states with proto-modern republic governments, helping to spark the enlightenment. The Ancient Greeks as well lived as city states, though I’m admittedly under read.