For the last several years, Paul Romer has worked out a careful plan to launch a charter city in the developing world. Â He seeks to test the hypothesis that economic development and “inclusive growth” can take place in a poor nation if it commits to changing its “rules of the game” regarding taxation and regulation. Â To test this important hypothesis requires a partner who is willing to commit to devoting a geographical area within its boundaries to be the home for the new city. Â The NY Times reports bad news in the case of Â Honduras.
I am a Visiting Scholar at NYU’s Urbanization Project. Here is a quote:
“There are two ways to accommodate the additional 3 – 5 billion people who will end up in cities this century: expand existing cities or build new cities. UP will therefore start with two primaryÂ initiatives. One, led byÂ Paul Romer, will focus on new cities and particularly the potential for new cities to advance reform in the developing world and to improve choices for urban migrants. Another initiative, led byÂ Shlomo Angel, will focus on the expansion of existing cities in the developing world.”
When an academic has a new idea, how often does he/she find a “guinea pig” who is willing to try it out? Â I moved to California in part because of my excitement about being involved in the implementation of the state’s anti-carbon AB32 initiative. Â This is a green guinea pig effort.
In the case of charter cities, Â I’ve joined Romer’s NYU team to work on the possibility that these charter cities will be “green cities” because of the new rules and incentives that would introduced in such cities. Â For example, starting from a clean slate such cities might be able to introduce congestion pricing and pollution pricing to minimize urban pollution externalities that damage quality of life in cities around the world.