A charter city is a new city with new rules. Its “special jurisdiction” means that a host country gives the city government the power to write new rules for how it runs. With a 2009 TED Talk, Romer, a Nobel Prize winner and former Chief Economist of the World Bank, became the most well-known supporter of charter towns around the world.
In July 2008 he visited Madagascar, where the government was interested in creating two charter cities. However, the idea of giving up land to foreigners proved unpopular.
Economic Growth in Developing Countries
The overwhelming importance of economic growth remains true in modern times. The greatest ongoing reductions in poverty and suffering are coming not from international aid projects, but from development, as low-income countries find new ways to do things more efficiently and climb the ladder of technological advancement.
Paul Romer has attempted to make charter cities an engine of economic growth in developing countries. He has argued that with better rules and institutions, less developed nations can be set on a different and better trajectory for growth. In his model, a host country would turn responsibility for a charter city over to a more developed trustee nation, which would allow for new rules of governance to emerge. People could “vote with their feet” for or against these rules.
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Some Attempts failed, and some are still in the Game
In 2011, the government of Honduras considered creating a charter city, but without the oversight of a third-party government. Romer was the head of a “transparency committee,” but he quit in September 2012 when the Honduran government agency in charge of the project signed agreements with foreign developers without telling the committee.
In 2018 a cryptocurrency company Ledger Atlas proposed a cryptocurrency-based special economic zone in Papua New Guinea. A memorandum of understanding established Ledger Atlas as the governing entity, able to control migration, enact laws, and issue passports. The proposal did not move forward.
The president of El Salvador announced plans for a Bitcoin-based charter city in November 2021. In January 2023, several charter city projects are under development across Sub-Saharan Africa. Itana should be a hub for African Tech Workers outside Lagos.
Other African charter cities include Nkwashi (Zambia) and Silicon (Zanzibar), a new Tech Hub located on the Tanzanian Island. The Rwanda Development Board has also announced plans to establish a catalytic investment fund for charter city projects across Africa.
