Here's an interesting article in the Wall Street Journal.
Summary: Economist Paul Romer is trying to set up a 'chartered city' in Honduras, along similar lines as that of Hong Kong. It appears that the government of Honduras is interested in the idea and has already voted to approve the "experiment". Mr. Romer is currently looking for a financial guarantor--he's looking for state support--for his project.
I like the idea of a 'charter city' as it is explained. It sounds like something an anarcho-capitalist can get behind and support--set rules, freedom to come and go, free trade zone-type environment. I dislike the need for some sort of 'sovereign' backing, however.
Anyone else have any thoughts?
"All men having power ought to be distrusted to a certain degree." -James Madison
"If government were efficient, it would cease to exist."
Is it just me or does the whole thing reek of friedman?
Why would the government of Honduras give up any power willingly?
The fallacies of intellectual communism, a compilation - On the nature of power
Stranger - Laffer Curve.
From what I've been reading, the Honduran government is hoping for two things: a) stemming the emigration of native Hondurans; and, b) bringing in investment into the country beyond the confines of the charter city.
Then why not apply the reforms to the whole country?
I don't know their intentions but perhaps they are trying a 'free-range experiment' to see how they can profit from it. They probably don't want too many of their subjects to have greater economic freedom unless it backfires on their regime politically.
It's a cool idea that, if put into practice, is bound to help the poor. However, from the outset Romer's idea of "charter cities" includes top-down rules, regulations, and treaties between multiple nations. It's not revolutionary, but it's a step in the right direction.
Political Atheists Blog
It’s a great idea because it recognizes that state-wide pro-market reforms do not work, due to too much resistance (just think Thatcher).
Confining those to a small areas is both possible, and allows for capitalism to speak for itself (think Hong Kong). For third world countries, there could be only a few better ideas than to outsource their administration to more experienced countries.
Sure it’s not the best idea conceivable. Why outsource ‘government’ to some foreign country while you could just sell a huge tract of empty land to some firm for development, selling it sovereignty along with the land itself? Foreign states are states nonetheless, and frankly I do not see any pro-market government these days to which to delegate the city. Still, much, much better than nothing.
The only problem is that this experiment, on a much smaller scale, has been operated once: colonialism! In the former Ottoman Empire and China especially, foreigners (and, in the case of the Ottomans, citizens of different religions too) where grouped into their quarters were they observed their own laws, while the rest of the people carried on with their lives (sort of Dubai, with its English common law, vs. the rest of the UAE, with Sharia). Economically it worked like a charm and brought freedoms to these countries that they would never have been able to secure for their people. Politically though it enraged the national-socialist peoples of these Empires, as a breach of sovereignty. Nowadays you’ll only hear ill said about ‘capitulations’. One can only hope that the repetition of the experiment will end up differently.
I've seen a lot of "special taxation zones" already. They usually are even more corrupt than the rest of the city, because they are created by and for politicians.
Corruption is good