Will Charter Cities Solve Global Poverty?

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Can charter cities solve global poverty? Paul Romer, a New York University economist, believes they can. He originally proposed the idea of charter cities, or start-up cities. In short, these are modern-day cities that are more or less “placed” in areas with high poverty, to try to attract businessmen and companies to move in. The idea is to replace foreign aid with private investors, ones who want to invest in the previously-poor cities, which now have a chance to prosper. Honduras has a charter city; people who live there volunteered, and were not forced there due to poverty. Within the city, the burning of wood, coal, and gasoline is illegal, making the location relatively pollution-free.

These cities are new zones of reform, that govern by different laws in regards to life and business. Although the idea of “company-made towns” has been done before, this is a new twist on an old idea. Paul Romer wishes to free citizens and businesses of these specific cities from previously used rules and laws, and to create new ones that will hopefully allow them to prosper. If charter cities help alleviate global poverty, the idea would also create economic hubs in low-income areas across the world. He equates starting up a new city to starting up a new business. He believes this new charter city system will work due to the increased urbanization around the globe.

Unfortunately, the city in Honduras failed, due to the lack of independent oversight, and the presence of the corruption that the city was meant to prevent. Romer believes that it is likely that charter cities solve global poverty, if strong independent oversight exists. He certainly still believes in the idea. Overall, the idea is promising, but has yet to be proven. If successful, it could prove to be an incredible solution to some of the poorest areas of the world, and would create new markets for developed countries like the United States. Romer’s next attempt is to make charter cities in those places affected by the Arab Spring.

– Corina Balsamo

Sources: Smart Planet, Fast Coexist
Photo: Lee Hudson Teslik

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