Can A Charter City Save Honduras?

Adam Davidson explores Honduras's experimentation with economist Paul Romer's theories on the need for poor countries to build special economic development zones that essentially "start from scratch" with new legal and political systems.

1 minute read

May 14, 2012, 7:00 AM PDT

By Jonathan Nettler @nettsj


Based on the belief in the economic power of well-run cities, and the crippling effects of "invidious systems (corruption, oppression of minorities, bureaucracy)" often found in poor countries, "Romer developed the idea of charter cities - economic zones
founded on the land of poor countries but governed with the legal and
political system of, often, rich ones." 

Honduras imported the idea in late 2010, and has implemented the concept to varying effect since then. 

"There are, of course, countless ways that this
charter city could go wrong, but Romer has a point," observes Davidson. "Huge numbers of
people are already moving to the world's cities, too many of which are
set up to create unstable poverty. Wealthy countries spend billions per
year on projects designed to reform governments, build modern utilities
or teach their workers new agricultural techniques. For all the cash,
there has been very little success. Sponsoring a charter city, Romer
said, may be a better (and cheaper) way to help."

Over at Next American City, Greg Lindsay has a more thorough exploration of the subject.   

Tuesday, May 8, 2012 in The New York Times

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