“Roughly 3 billion people from the world’s working poor will move from villages to cities over the next few decades. The choice is not whether the world will urbanise — it’s doing so, fast — but where and under which rules. Cities are so valuable that people will choose slums over rural poverty if that is their only choice. But charter cities would give them another option.” —Paul Romer (The Sunday Times)
The Sunday Times published a commentary by Paul Romer today. The piece was adapted from a longer article written for the February edition of Prospect magazine.
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Jamaica could let its diaspora vote in its next election. Doing so may be its best hope for a healthier form of political competition then, and therefore for better policy now. It may be its only hope for moving away from the unstable trajectory created by bad policy and out-migration of its well educated citizens.
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In the latest edition of Fast Company, Greg Lindsay writes about the global potential for new cities and some of the firms positioning themselves for this opportunity. He focuses on New Songdo, a small city-scale—host to about 300,000 people during a typical weekday—development 40 miles west of Seoul, South Korea. New Songdo will serve as a testing ground for firms operating at the frontier of urban technology.
Gale International, the firm the South Korean government hired to build the city, designed New Songdo to emit one-third of the greenhouse gases of a typical city its size. Cisco will experiment with a city-wide network on top of which it will sell consumer facing hardware and additional services, “bundling urban necessities—water, power, traffic, telephony—into a single, Internet-enabled utility…”
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Paul Romer: The latest post in our E-seminar series of contributions from economists and other experts comes from Kris James Mitchener of Hoover Institution and Santa Clara University and Noel Maurer of Harvard Business School. They write about several case studies in which countries that struggled with corrupt customs agencies successfully used external institutions to clean them up and increase revenue collection.
Corruption is a serious problem for governments in the developing world. In states where corruption is rampant, it is very hard to build a coalition to stamp it out. Such corruption is particularly pernicious when it affects the revenue-collecting functions of the state: in addition to the deadweight costs corruption imposes on society, corruption in revenue collection reduces the state’s ability to offer fiscal incentives to public officials to obey the law. The recent experience of Angola suggests that a troubled nation can reduce corruption and increase revenue collection by adopting external institutions. Angola outsourced customs collections to Crown Agents, a British nonprofit with expertise in public financial management. In so doing, the country tripled its tariff revenue in the span of a few years, all the while reducing its tariff rates.
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In the current circumstances, any attempt at creating a new city in Haiti under foreign control would turn a humanitarian military intervention into a humanitarian military occupation. This approach is fraught with risks that the concept of a charter city is designed to avoid.
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Which parts of globalization matter for catch-up growth? This was the question Paul Romer asked during a session titled Growth in a Partially De-Globalized World at this year’s American Economic Association conference in Atlanta. Romer pointed out that while the barriers to trade in goods and services receive a great deal of attention, other barriers to the exchange of ideas represent an important obstacle to the benefits of globalization as well.
Tim Kane of the Kauffman Foundation offers an excellent discussion of the talk on the Growthology blog.
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“…[P]icture someone from a very poor country, a family, a couple of young children, a father and a mother, and picture them moving to Munich or Zurich or Vancouver. We don’t think of that as colonial; we think of that as something that gives them opportunities that they really want. And this proposal is no more than saying if we can’t let hundreds of millions of people go to those cities, let’s create some new cities that are run like those cities where large numbers of people could go.” —Paul Romer (Deutsche Welle)
Deutsche Welle, an international German broadcaster, recently interviewed Paul Romer about charter cities.
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