Many people unfortunate enough to have been born in third world countries (and I know quite a few) would give their left arm to live in America. Since we can't take everyone who would want to come, the next best option is to bring slices of America to the third world. A couple of hundred years ago that would have been accomplished by British/Roman-like colonization, but these days that's just too uncouth: some third-worlders may prefer their present form of government to ours. Fine! Enter charter cities.
The deeper problem, widely recognised but seldom addressed, is how to free people from bad rules. I floated a provocative idea. Instead of focusing on poor nations and how to change their rules, we should focus on poor people and how they can move somewhere with better rules. One way to do this is with dozens, perhaps hundreds, of new “charter cities,” where developed countries frame the rules and hundreds of millions of poor families could become residents.
How would such a city work? Imagine that a government in a poor country set aside a piece of uninhabited land. It invites a developed country to enter into a new type of partnership, in which the developed country sets up and enforces rules specified in a charter. Citizens from the poorer country, and the rest of the world, would be free to live and work in the city that emerges. It could create economic opportunities and encourage foreign investment, and by using uninhabited land it would ensure everyone living there would have chosen to do so with full knowledge of the rules. Roughly 3bn people, mostly the working poor, will move to cities over the next few decades. To my mind the choice is not whether the world will urbanise, but where and under which rules. Instead of expanding the slums in existing urban centres, new charter cities could provide safe, low-income housing and jobs that the world will need to accommodate this shift. Even more important, these cities could give poor people a chance to choose the rules they want to live and work under. ...
There are large swathes of uninhabited land on the coast of sub-Saharan Africa that are too dry for agriculture. But a city can develop in even the driest locations, supported if necessary by desalinated and recycled water. And the new zone created need not be ruled directly from the developed partner country—residents of the charter city can administer the rules specified by their partner as long as the developed country retains the final say. This is what happens today in Mauritius, where the British Privy Council is still the court of final appeal in a judicial system staffed by Mauritians. Different cities could start with charters that differ in many ways. The common element would be that all residents would be there by choice—a Gallup survey found that 700m people around the world would be willing to move permanently to another country that offers safety and economic opportunity.
Author Paul Romer cites Hong Kong as the archetype and compares its success under British rules to the decades of failure experienced by mainland China.
Why won't this happen? Despite the billions of average people who would benefit, consider the long list of powerful interests who would end up losers if charter cities took off: existing despots and their inner circles; the United Nations; zillions of Non-Governmental Organizations who parasitically exploit aid streams; socialists; nationalists; and probably many more. These loser groups would all band together to prevent the average people of the world from moving en masse into charter cities with better rules.