Jumpstart a city
Cities are the heart of civilisation and growth. A well functioning
city is a great opportunity to obtain economic growth and social
change. The best thing that we can hope for, in thinking about the
lives of poor people or those facing discrimination in rural India, is
for them to escape to a city. We in India don't have a single well
functioning city. As an
example, governance
in Bombay is deeply broken.
How could a poor country kick start the emergence of one or more
good cities? Paul Romer has an idea : To walk down the Hong Kong
route, to create `charter
cities'. See
paths to good cities. Writing on CFR.org,
Mallaby reports some big events. Last year, Madagascar came close
to signing onto a charter city, but it did not work out. And last
month, Honduras approved a Constitutional Amendment which will make
this possible. So Paul Romer's three-year crusade appears to be going
from a wild idea to the zone of possibility. If it works, it'll score
bigger impact than Romer, 1986, which is in Nobel Prize range.
I personally think it would be a much better use for aid money, to
go down this route, instead of the conventional development economics
that aid agencies emphasise. I feel these existing strategies range
from useless to counterproductive. In contrast, it seems that under
the right conditions, a charter city could work, and if it works, the
upside is phenomenal. So even if 10 charter cities are attempted and
one works, it'd be a huge contribution.
On a related theme, you might like to see:
if India had a Hong Kong?
Elect a foreigner
Raghuram Rajan has been talking about another line of attack. He
has a recent paper titled
States, Vicious Cycles and a Proposal. The blurb reads:
...examines the problems of failed states, including
the repeated return to power of former warlords, which he argues
causes institutions to become weaker and people to get poorer. He
notes that economic power through property holdings or human capital
gives people the means to hold their leaders accountable. In the
absence of such distributed power, dictators reign.Rajan argues that in failed states, economic growth leading to
empowered citizenry is more likely if a neutral party presides. He
proposes a unique solution to allow the electorate to choose a
foreigner, who would govern for a fixed term. Candidates could be
proposed by the UN or retired leaders from other countries; they would
campaign on a platform to build the basic foundations of government
and create a sustainable distribution of power.Rajan emphasizes that this is not a return to the colonial mode:
the external candidate (like all the others) would be on a ballot and
the electorate would choose whether he or she was their best chance to
escape fragility.
Each country is unique and we have to ask ourselves what might work
where. In India? Bangladesh? Sri Lanka? Pakistan? Afghanistan?
Libya?
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