According to Romer much of economic growth is down to the good use of ideas and the need for rules to enable such use. “Put simply, some countries are better able to establish the type of rules that help good ideas spread, while others are trapped by bad rules that keep ideas out. The rules stopping cheap electricity, for instance, are not hard to identify. The threat of expropriation or political instability stops many western electricity companies moving into Africa. Those that do set up there can exploit their power as monopolists to charge excessive prices. Often they offer bribes to stop rules being enforced, or pay bribes themselves. Good rules would stop all this. So to unleash the potential of the marketplace, poor countries need to find a way to create good rules.”^[1]

Charter cities are that way of creating good rules. We know which rules work as we know which countries are richest, have the highest growth and are the most attractive for businesses to invest in. Unfortunately even if a poor country makes a commitment now that it will implement good rules and never use the army to undermine them they are unlikely to be believed due to the record of poor developing countries over the last 50 years. This is where the rules being created by a developed country helps. Investors will know what the rules are and will know that they will be consistently applied.

1. ^ http://www.prospectmagazine.co.uk/2010/01/for-richer-for-poorer/

The Charter cities idea does not really explain how we get around this commitment problem. How are companies to be sure that the charter will be kept intact over the long term? That the country where the charter city is will not use force against it as it may do any other city in their country? If a country has a record of not living up to commitments then it is difficult to see that a charter is going to make much difference.

As it is already known that these types of rules are best then why are they not voluntarily adopted by the whole country rather than needing charter cities? Why do we need the west to impose such rules? The problem is that rules come out of culture and society as much as they create such culture and society. Are such alien rules really likely to be accepted by the new population when they get there without some kind of force being applied?

Migration is often thought of as a problem. Richer countries in particular are worried that they will slowly be swamped by unskilled migrants from developing countries. Immigration whether real or imagined often has a major influence on political debate leading to constant calls to prevent foreigners getting in and stealing our jobs. Charter cities potentially solves this problem. Rather than migration being a problem for charter cities it is absolutely vital. Charter cities will be able to make use of the vast pool of people in poor countries who are going to migrate to urban areas from their rural homes in the next few decades. Having such cities will provide somewhere where they will be able to create a real new life for themselves. “We know from history that the competitive pressures created by migration can boost economic growth. But strong opposition to immigration in the world’s richest economies prevents many people from moving to better systems of rules... Indeed, charter cities offer the only viable path for substantial increases in global migration, bringing good rules to places that the world’s poor can easily and legally access, while lessening the contentious political frictions that arise from traditional migration flows.” A Gallup survey between 2007 and 2009 found that 700m people around the world would be willing to move permanently to another country that offers safety and economic opportunity.^[1] this shows that the population base for charter cities is there. As millions migrate to the cities it would be best if we make sure that there are good functioning cities there to meet them rather than migrants going straight to slums.

1. ^ http://www.gallup.com/poll/124028/700-million-worldwide-desire-migrate-permanently.aspx

They may simply result in a new kind of brain drain away from the poorer countries. Surely the poorest countries need their best minds to stay at home and create development and these new rules across the whole country not go to some westernized city. Another gallup poll shows that it is a countries’ richest citizens who most wish to migrate.^[1]

1. ^ http://www.gallup.com/poll/109144/Countrys-Wealthiest-Citizens-Report-Greatest-Desire-Migrate.aspx

Creating new cities may seem like a costly way of creating development but this is not necessarily the case compared to the large amounts we are willing to spend as aid at the moment. At the moment about $120 billion is spent on aid^[1] so a portion of this could go to helping create the new cities. However as they would be good places to invest a large portion of the costs could probably be paid by private investment. Creating a new city need not take land that is otherwise in use as cities can be built on almost any type of land. Dubai is a good example of a city being built somewhere which is pretty inhospitable and where the land could not be put to any other use.

1. ^ http://www.oecd.org/document/11/0,3343,en_2649_34447_44981579_1_1_1_1,00.html

The other thing that businesses need if they wish to locate somewhere is infrastructure. They need ports and airports to be able to export as well as roads and mass transit to be able to get around the city. Electricity, water, and communications such as phones and the internet are all needed in order to be able to freely and effectively do business with the world. This is something that the rich donors would provide they have the expertise to make sure that the right infrastructure is in place and that it will all work.^[1] “Cities are just the right scale to offer basic conditions. So long as they can trade freely, even small cities are big enough to be self-sufficient.”

1. ^ http://www.globalenvision.org/2010/07/20/building-cities-new-rules

The idea may be great but it will never work. It is not possible simply to take an area of land and totally disconnect it from politics in a country. It would be a hard task to make sure that previous interests, corruption etc that are a problem in the country that the charter city is set up does not also get into the charter city. Elliott Sclar, a professor of urban planning at Columbia University says that “Romer makes it sound as though setting up a charter city is like setting up a fairground... We take a clear piece of land, we turn on the bright lights, and we create this separate environment that will stand apart from everything that’s around it. I wish it were that simple.”^[1]

1. ^ http://www.theatlantic.com/magazine/archive/2010/07/the-politically-incorrect-guide-to-ending-poverty/8134/1/

Colonialism was all about imposing foreign rule on luckless natives. Neo colonialism has been much more subtle with the rich nations dominating trade with their firms stripping countries of their resources while telling the poor that it is for their own good – the companies are afterall providing investment. So Charter cities are simply another step in this neo colonialism. We will now take poor countries best people as well as their resources through putting them to work in new cities that are governed by alien rules and laws.

Indeed it almost takes us back to colonialism itself which let us not forget was to help civilise the natives. This does almost exactly the same thing although it would not be politically correct to say it of course. But these cities are creating pockets of western laws and rules that should do just that.

"A colony is mostly ruled by another state or can be run independently. Unlike a puppet state or satellite state, a colony has no independent international representation, and its top-level administration is under direct control of the metropolitan state.

The term "informal colony" is used by some historians to describe a country which is under the de facto control of another state, although this description is often contentious."^[1]

1. ^ http://en.wikipedia.org/wiki/Colony