From Poverty to Prosperity Watch
By Arnold Kling
Bill Easterly interviews Paul Romer. Romer says,
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.
These ideas are stressed in our forthcoming From Poverty to Prosperity, which features separate interviews with both Easterly and Romer.
I will say that from a Tyler Cowen Masonomics perspective, Romer’s idea for charter cities seems a bit naive. Cowen stresses the importance of cultural thickening. Cultures differ, and culture matters. Just as you don’t turn Iraq into a functioning democracy simply by giving the country a constitution and elections, I do not think that you can create a functioning charter city simply on the basis of its formal rules. The informal norms followed by the inhabitants of the city will be much more important.
If the charter city is in fact governed by the rule-makers, and they undertake effort to ensure that informal behavior is consistent with formal rules, then the results are more likely to conform to Romer’s hopes and expectations. However, that brings the charter city concept closer to the notion of colonialism.