Romer had dreamed up this idea of a “charter city” some years before, inspired by the case of Hong Kong, which became a magnet for impoverished Chinese migrants while still under British rule, and China’s “special economic zones,” the most notable of which, Shenzhen, grew from a tiny community with a population of 30,000 in 1980, when the Shenzhen SEZ was first established, to the sprawling city of 13 million that inspires awe in visitors today. Romer’s charter-cities campaign gained considerable attention, including an admiring profile in the pages of The Atlantic, but the nagging question was whether there was a government daring enough, or desperate enough, to fully embrace the concept.
For a brief moment, it seemed as though Honduras might fit the bill. Its government sought Romer out to help them establish a “Region Especial de Desarrollo,” or RED. Unlike a conventional free-trade zone, this RED would enjoy a great deal of autonomy and, ideally, a partnership with a consortium of governments with a strong reputation for probity and transparency. Early on, Romer was especially keen to secure the cooperation of the Canadian government, to whom he and his frequent collaborator Brandon Fuller addressed an engrossing 2012 report, and he managed to convince the Mauritian Supreme Court to serve a similar function in the RED. In the end, the Honduran initiative fizzled, not least because its president at the time, Porfirio Lobo Sosa, was a polarizing figure many deemed illegitimate. Once it became clear to Romer that the Honduran government was an unreliable partner, he abandoned the relationship, perhaps out of a recognition that his continued participation would lend legitimacy to an enterprise he now considered badly compromised.
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Honduras has continued to explore the idea of “employment and economic development zones,” albeit on a far less ambitious scale. As The Economist reported last August, the goal of these ZEDEs is to attract international investment capital (picture multinational firms seeking a site for labor-intensive garment manufacturing within easy reach of lucrative North American markets) that would generate remunerative employment opportunities. “Rather than fleeing to the United States, Hondurans threatened by the country’s ubiquitous gangs could find security and livelihoods in ZEDEs.” So far, however, these ambitions haven’t come close to being realized. Simply put, Honduran politics are so byzantine and corrupt that foreign investors have been reluctant to wade in too deeply. These are the problems Romer hoped to solve with a powerful and independent Transparency Commission, which never really got off the ground.
It is tempting to wonder what might have happened if Romer’s vision had come to pass. Imagine if Honduras had been willing to partner with a consortium of governments that are known for their responsiveness to their citizens and the quality of their public administration (Canada and Mauritius would be among them, but so too might Chile, Estonia, and Botswana, all of which have overcome serious governance challenges) and to welcome migrants not just from elsewhere in Honduras but from throughout the region. Romer and Fuller concluded their 2012 entreaty to the Canadian government on a stirring note: “Our urbanizing world does not need more aid; it needs … more of the rules, norms, and know-how that lead to good governance, economic vibrancy, and the rule of law. Canada now has an opportunity to partner with Honduras to tackle directly the biggest obstacle to growth and development all over the world: the dysfunctional systems of rules and enforcement that keep people from reaching their true potential.” How long will it take for us to heed their clarion call?
As it stands, the migration debate in the market democracies goes something like this: Either we open ourselves to any and all would-be migrants seeking a better life, which would mean overriding the broad and deep political consensus against drastic increases in immigrant inflows, or we resign ourselves to the fact that billions of people around the world live under the dysfunctional governments that squelch opportunity. Charter cities offer a third way—one we badly need.