Sunday, 18 October 2009

Charter cities

Paul Romer has put up a website with his suggestion for freeing people from lousy rulers: create new "charter cities" they can move to.

I am rather sympathetic. A lot of Europeans in the C19 escaped to America from their lousy rulers. And as the FAQ states, within America, increased mobility was liberating - for example, in the Great Migration, Blacks moved from the South to Northern cities like Chicago.

Also, I have a related paper.

On the other hand, there are issues. One is the effect of competition on the lousy rulers themselves (and all the people who will still be living under them). This need not always make them better, as explained by the sophisticated graph on the left. A bit of competition might make rulers invest more and try harder to keep their people happy - after all, the population provide the ruler's tax base. But if there is so much competition that there's no way the ruler can match it, he may just opt for the short-term strategy and steal everything.