NEW CHARTER CITIES?

NEW CHARTER CITIES? The economist Paul Romer has been campaigning for the establishment of “charter cities”, which would have almost no economic regulations, modeled on the success of Hong Kong in the twentieth century. This article in the Wall Street Journal (February 3) by David Wessel tells how the Congress in the Honduras has voted to amend the Constitution to permit a model city. Will it happen? People are skeptical, in part because of the possibility that Honduras would change it mind at some time in the future. (Part of Romer’s proposal is to have a country like Canada or Norway guarantee that the free market regime will remain in effect.) The comments on this post on the Marginal Revolution blog point out some of the pitfalls for the proposal. One of the comments points out the heavy burden of regulation in Honduras. The Marginal Revolution blog also links to this summary of Romer’s proposal.