Paul Romer: recommendation

Transcript context

…How do you frame what happened in Honduras, conceptually? I thought in selling this idea, to do this, you’d need both some country that is willing to volunteer or supply the location for a new jurisdiction, and then some countries — a country, or more than one country — that can help establish the new jurisdiction, like its legal systems and so forth, and administrative — all the systems you’d need. I thought the biggest risk constraint on this idea was that it would be hard to find countries that would be willing to say, “You could use our land to start something new.” So I spent time in Madagascar. I spent time in Honduras. They were actually willing to try this, but what I think, in retrospect, I should have done, and what I’ll do now, is go first to the countries which are willing to help set something up because a country like Honduras was not — the reason it was willing to do something radical like a new charter city was that it did not have the internal capacity to do something like a charter city. What went wrong was that we couldn’t get sufficient participation from outside of Honduras in setting this up. And then, frankly, in Honduras there was a little bit of lack of transparency. They didn’t really want outsiders either because it was kind of a small group that actually wanted to set these things up and control it internally. So I think the scarce player, the short side of this market is going to be countries that are willing to say, “We will help set up a new place that people can go to.” It’s the citizens of those potential countries that we need to persuade. This would be worth trying. And if they’re willing to do it, then I think we can find locations where it could be done. 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.…

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