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Romer 2012

Romer calls on charter cities as solution to reduce poverty in the developing world

Paul Romer

Compares the creation of new cities to the colonization of America
April 12, 2011

Speaking at Brandeis International Business School, noted economist Paul Romer shared his vision for the creation of charter cities, an innovative idea designed to eliminate poverty. His plan calls for the creation of special reform zones that allow governments to quickly adopt new sets of rules that will vastly differ from the country’s prevailing legal system.

“We need to figure out how to move from configurations where good rules are not currently in place, to ones where good, enforceable rules are available. The claim I have been making is that building an entirely new city from scratch on a green-field site would be one way to do this,” said Romer.

In his remarks entitled "Charter Cities - From Idea to Implementation," Romer outlined the reasoning behind the need for a new system of promoting opportunity and shared experiences. Assistant Professor of Economics Can Erbil moderated a question and answer session after his presentation.

Romer’s hope is that charter cities will be beneficial to all parties involved, from the private investors who will collect fees for the services they provide, to the residents who will experience far better working and living conditions than they would in their native towns. “Almost everything humans do is more productive in a city. Everybody wants to move to places where they can have higher wages and a higher quality of life,” he said.

Romer has focused much of his career on the idea that economic growth occurs through the rearranging of existing resources in new and advantageous ways. This is the central theme which runs through his charter cities concept. Increasing productivity and economic growth, relocating residents of impoverished countries away from perilous conditions, and creating industrial and commercial hotspots in previously uninhabited areas are just a few of the many benefits Romer believes could come from the establishment of these experimental living zones.

While there is not yet a fully constructed charter city to date, Romer has already seen some success in an amendment to the Honduran constitution that will allow for the creation of special development regions. This decisive first step toward creating opportunity has not gone unnoticed, as major international investors are starting to show their interest and support.

Once named one of the Time Magazine’s 25 Most Influential Americans, Romer believes that these charter cities will change the landscape of the world to come. “If you think about history, nations come and go but cities are remarkably durable. We have the chance now to have an enormous impact on what life will be like on earth for everyone who comes after us.”