Paul Romer: prediction

Transcript context

…Do you worry about a negative selection effect in the volunteers? In a lot of your work, you’re concerned with corruption, quite appropriately, I would say. And could it be, the countries that want to do charter cities — well, it’s one branch of the government wants to do something a little funny without the other branches of the government seeing, and, in essence, cut its own deal, and that there’s something intrinsically worrisome about a country volunteering to do it. I think this is one of these places where we have to be willing to just select from the feasible alternatives and not hold out for some ideal that we can’t achieve. It’s worth being specific here. My hunch is that China will eventually realize that the way to pay for the infrastructure that it’s building as part of this Belt and Road program is to do urban real estate development. The transport never pays for itself. It’s always the real estate that goes up in value that you use to pay for all of this. So I think that the Belt and Road project is inevitably going to turn to a version of new city, city-scale real estate development to finance what they’re trying to do. In parallel, the United States could be offering its own version of cities around the world that are new. There’s gains in the value of the land that pay for the stuff you want to do. Then to answer your question, would I be worried if that’s the way that China and the US compete with each other? Actually, no, I think that would be pretty good. The Chinese wouldn’t set up those cities and run them exactly the way that somebody from the United States might prefer. But if people who want to migrate could choose between a Chinese location and a US location, that would put some pressure on both the US and China to organize these new opportunities in ways that really benefit the people who will go there. How important is religion for explaining economic development? You said before, norms are important, and charter cities, in a way, are identifying laws, rules, norms as a public-good legal structure. So why isn’t religion also a key?…

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