Paul Romer on Charter Cities

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🗓️ 26 April 2010

⏱️ 64 minutes

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Summary

Paul Romer of Stanford University talks with EconTalk host Russ Roberts about charter cities, Romer's idea for helping the poorest of the poor around the world. Romer envisions a city where the rules about property and safety and contract and so on are rules that allow individuals to flourish in an urban setting in contrast to the cities they live in now where so many aspects of economic and personal life are dysfunctional. Charter cities would be havens for the world's poor and could be created on uninhabited land in either rich or poor countries. This concept raises many difficult practical questions--some of them are discussed here along with how Romer came to be interested in creating the concept and how he hopes to bring it to reality.

Transcript

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0:00.0	Welcome to Econ Talk, part of the Library of Economics and Liberty. I'm your host Russ Roberts
0:13.9	of George Mason University and Stanford University's Hoover Institution. Our website is econtalk.org
0:21.2	where you can subscribe, find other episodes, comment on this podcast, and find links to
0:26.5	other information related to today's conversation. Our email address is mail at econtalk.org. We'd
0:33.6	love to hear from you.
0:36.7	Today is April 19, 2010, and my guest is Paul Romer of Stanford University. Paul, welcome back to
0:45.7	Econ Talk. It's great to be back again, Russ. While you're championing a whole new way of economic
0:52.7	development called Charter Cities, tell us what Charter Cities are and why they might make the
0:58.3	world a better place. Well, let me start with the practical and then give you the more abstract
1:05.8	academic. The practical suggestion is that we could identify unoccupied pieces of land somewhere
1:14.6	on earth that are good locations for building a city of 5, 10, maybe 20 million people. We could
1:23.3	establish a system of rules that would apply in this new city and then people would have the choice
1:30.0	about whether to opt in to live under those those rules. So it's unoccupied land and a Charter
1:38.2	which specifies a rule and a choice for residents, investors, employers to come in or not.
1:47.0	In practice, that's what it would mean. It would take some governments to come together and
1:51.0	establish what piece of land, how do we set up a legal governance structure that would actually
1:55.8	enforce credibly out into the future the rules specified in the Charter. Now, what's the larger
2:05.9	academic motivation here? There's a very broad recognition amongst people who are thinking about
2:14.4	development that the bottleneck here is systems of rules that hold people back. Rules that could
2:23.4	be different, we have demonstrated cases of better rules and with these inefficient rules, people
2:32.2	are very far away from the efficiency frontier that if we shifted the better rules,
2:37.3	everybody could be better off. People living in poor countries could be better off, people living in
	...

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