-----ASSESSMENT OF PAUL ROMERS "CHARTER CITY" CONCEPT & ITS APPLICABILITY IN ENDING RP POVERTY-----

“A CLOSER LOOK TO CHARTER CITIES”

“There‘s no impediment, other than a failure of imagination, that will keep us from delivering on a truly global win-win solution.” —Paul Romer

Charter cities are a proposal to build cities from scratch in the world's poorest, outsourcing their design and government to rich countries. According to Romer, "To understand how to alleviate poverty, we must understand growth and progress. Progress comes from new and better ideas. Ideas come in two flavors, technologies and rules. To foster growth and development, the world’s poorest residents need an opportunity to copy existing technologies and existing rules that are known to work well."

Charter cities accelerate the adoption of known good rules, offering a truly global win-win solution by giving people access to better rules and the gains from exchange to reduce poverty. It let people move to a place with rules that provide security, economic opportunity, and improved quality of life. It is also low risk. Charter cities increase access to existing rules and technologies by giving people new options and letting them choose. Charter cities give leaders new options for improving governance, options they do not have in the existing web of bad rules to which they are confined. Choice protects them both from the worst possible outcomes. Choice and the potential to copy existing ideas are a powerful combination.

However, there is no definitive evidence that poverty is always lessened by growth and if charter cities can really promote equality. There are also several disadvantages that goes along with it which includes exposure to legal challenges with respect to what constitutes a “municipal affair” vs. a statewide concern, limited case law in comparison to general law cities from which to evaluate legal exposure when applying charter language, costs associated with charter amendments, and limitations contained within some detailed charter documents restricting local authority beyond that experienced by general law cities.

In applying the concept of Charter cities in the Philippines, I think redistribution from rich to poor has not and cannot solve more than a tiny fraction of the problem. Even if you could perfectly equalize income zero effect on production, the citizens would remain stuck in poverty. On the other hand, charter cities have virtually no downside. A charter city begins on empty land and it can only grow by voluntary migration of people. If no one chooses to relocate, they’re no worse off than they would have been if the charter city had never existed. If efforts to start charter cities fail, at least they won’t harm the very people they’re intended to help. Charter cities are able to customize operations to meet the unique needs of their community and have more control over their use of funds because they do not have to follow many State-required procedures that are costly, and thus they have saved large amounts of local funds. Another is charter cities are able to pass ordinances that work better for their communities, so they are able to better tailor their procedures and ordinances to their particular needs. PEY

Paul Romer’s Charter Cities—An Answer to Ending RP Poverty??

Economist Paul Romer proposes founding many new charter cities in developing countries. Romer suggests that a developing country pass a law that sets aside a tract of land for a new charter city. This charter city would be administered by a developed third-party guarantor government, and citizens from the host country (and maybe other countries) could move in and out as they please. The point of the charter cities idea is to give citizens the choice about where they want to live and to provide the basic rules and amenities required for economic growth.

Ideally, by establishing a city with highly-developed rules and governance in an underdeveloped region, living and working in a charter city may provide a closer and more attractive alternative to moving far away to more developed countries.

In Romer’s conception, there are three main actors in the creation of a charter city. First, there is the developing host country. The host country provides the land, and designates that land as a special reform zone, subject to the foundational set of rules. Second, the developed guarantor country administers the region, perhaps with a board of governors and an appointed chairman like the Federal Reserve System in the United States. Third, the source country will be where the charter city’s residents come from. This may be predominantly from the host country, but there also may be a number of source countries.

To launch new charter cities, he says, poor countries should lease chunks of territory to enlightened foreign powers, which would take charge as though presiding over some imperial protectorate. Romer’s prescription is not merely neo-medieval. It is also neo-colonial.  

For me, a new city with new better laws is not the answer to end poverty. The real solution is on the Filipinos’ hands. We should learn from our past to make our future a better one.AMA

Paul Romer's fundamental idea: THE Charter cities

For many years, the politicians and academics make great effort to look for ideas that can successfully bring prosperity to the developing world. In recent years, and in particular since the publication of the World Bank's World Development Report in 2009, there is a growing consensus that the solution will have to involve more and better cities. The argument goes that the poor world's population would be able to benefit from the benefits of agglomeration.

However, there are many inconveniences that could endanger the prospects for a successful urbanisation in poorer countries, such as:

• A lack of appropriate urban infrastructures to cope with the growing population.
• Rural exodus and the associated loss of agricultural output.
• Steep rise in crime rates.
• The danger of accelerating the spread of infectious diseases due to inappropriate health care systems.

Paul Romer an economist, famous for his work on endogenous growth theory started promoting a controversial idea that in his opinion would help solve many of these issues: “The creation of charter cities”. His idea for the charter cities is that developing countries would give rich nations a portion of their country where the latter would then build cities from scratch, using cutting-edge technology. These cities would be managed by the foreign countries themselves and therefore would not be ruled by locally elected politicians. Furthermore, Romer said that citizens could however vote with their feet, deciding to leave if they were discontented with the way the city was being managed.

Obviously, this idea poses many questions, the fact that this would be a form of new colonialism. This is what Aditya Chakrabortty argues in an op-ed published last July 07, 2010 in the Guardian, with the title “Paul Romer is a brilliant economist – but his idea for charter cities is bad”, that you can read in this site:

http://www.guardian.co.uk/science/2010/jul/27/paul-romers-charter-cities-idea. Another piece on the same topic, with the title “The Politically Incorrect Guide to Ending Poverty”, published in The Atlantic, can be access at: http://www.theatlantic.com/magazine/archive/2010/07/the-politically-incorrect-guide-to-ending-poverty/8134/ . LYN 

Paul Romer’s Charter City Concept

Who is Paul Romer? 
               Paul Romer is an American economist, entrepreneur and an activist known for his work on the field of economic growth. He  earned a B.S. in physics in 1977 and a Ph.D. in economics in 1983, both from the University of Chicago. Moreover, Romer is currently trying to replicate the success of “Charter City” concept for him to use it as a device in studying economic growth. He believes that undeveloped countries can experience better route for growth if they have finer rules and institutions.  

Charter City          
              Charter city is a latest type of special reform zone extending the concept of special economic zone by increasing its size and escalating the scope of its reforms. This concept emphasizes the idea that a nation with good rules (including institutions), millions of people will come together to build a new city and there is a greater chance that economy of that nation will improve. Moreover According to Paul Romer, “A well-run city lets millions of people come together and enjoy the benefit they can get from working together and trading with each other”. He believes that for a nation to grow, citizens must be given more opportunity to transfer to other places, giving them more chance to live a healthy life.  

Applicability in ending RP Poverty      
               In the Philippines, Rules and laws established by the government are often violated and ignored. Other people think that these regulations are irrelevant and it cannot affect the economy as a whole. But Under Charter City Concept, rules and policies are significant factors in improving a nation. Unfortunately, most policies implemented in the Philippines are feeble and insufficient to forbid theft and violence in the country. How can Filipinos live the “good life” if our government is not addressing these issues? One solution is to adopt rules that are useful in boosting the economy and that will give citizens more chance to move to a better place and live a beautiful life. JAM

 “Imagine an alternative process in which people can migrate from a society with bad rules to another society with better rules. In this case, the rules in both places stay the same but people move between them. The process of movement between can be more effective than the process of change from within. Just as important, the presence of movement between creates pressures that speed up change from within.”

                                                                                            - Paul Romer


 Paul Romer, an economist known for his work on economic growth, has a plan to change that and recently resigned his tenured teaching position at Stanford to devote his full energies to the challenge. “Moving from bad rules to better ones may be much harder than most economists have allowed.” Romer’s plan calls for the establishment of Hong Kong-like “charter cities,” special zones within developing countries with better rules and institutions. The project has already attracted quite a bit of attention from both economists and the media. So Romer is a brilliant economist, and he has a new and big idea. And because he is The Great Romer, he gets to present this wheeze to national leaders, high-profile conferences and invitation-only gatherings of policy-makers.   Trouble is, the idea stinks. With little track record in dealing with poor countries, Romer has come up a grand scheme for lifting Africa and Asia out of poverty. What they need to do, he argues, is give up a big chunk of their land to a rich country. Policy experts from Washington can take over a patch of Rwanda, and invite along GM and Microsoft and Gap to come and set up factories. Poor countries give up their sovereignty in return for the promise of greater prosperity.   His big example is Hong Kong. At the end of the first opium war in 1842, the Chinese were marched on board a British warship anchored off Nanjing and forced to sign Hong Kong away to Queen Victoria. Over the next 150 years, the little island turned into Asia's number one capitalist success story. It was an example that Deng Xiaoping ended up copying on the mainland, in coastal provinces such as Guangdong – to explosive economic effect.   China's loss of Hong Kong should not be seen as a national humiliation or great international injustice, Romer has written, but "an intervention" which has "done more to reduce world poverty than all the world's official aid programmes of the 20th century combined — and at a fraction of the cost". What the world needs, the economist argues, is not one but 100 Hong Kongs.   Applicability in ending RP Poverty   The concept of Paul Romer of “charter cities” is actually nice in some parts. I don’t think that Filipinos will be open in the idea of Paul Romer about the charter cities. As a democratic country, many people may object on this concept. For me, I think we can still fight poverty in many other ways. We just need to strengthen the implementation of our laws in order to improve our nation. We do not need to be imperialized just to save our country from poverty. CHA