Why is the average income of Canadian and Japanese residents so much higher than that of North Koreans or Ethiopians? Daron Acemoglu offers his answer in a recent commentary for Esquire magazine. He argues that differences in institutions, or rules, are the key driver behind global inequality.
Acemoglu asks readers to consider the two cities of Nogales on the Mexico-U.S. border. On the Arizona side, residents enjoy relatively high incomes, good infrastructure, and reliable public services.
Our inner-environmentalist tends to romanticize rural settings. Rural areas offer open spaces and direct access to natural amenities. Cities bring to mind concrete, congestion, and pollution. Our inner-preacher counsels penance for our urban sins. People must suffer for wanting a modern lifestyle. Stewart Brand wants us to rethink these pastoral and moralistic instincts. As he explains, one of the best ways to protect the environment is to let the billions of people who live in rural poverty do what they want to do: move to cities.
“…[P]roposing some new rules [in a charter city] and then asking who would like to opt in—who would like to live under these new rules—could give us a mechanism to reform the rules under which we live, to change them, to improve them much more rapidly.” —Paul Romer (on BBCCaribbean.com)
Listen to the BBCCaribbean.com interview and read the related article.
AboutAs a research non-profit, Charter Cities focuses on the interplay of rules, cities, and economic development. The blog covers development challenges in general, but takes a special interest in the dynamics of rules and the practical issues that arise when governments use special reform zones to give people access to better rules. We use the same comments policy as the Economix blog.
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