Charter Cities vs. Anti-Foreign Bias
The Atlantic‘s got an incredible profile of Paul Romer. The highlight is yet another example of how anti-foreign bias blocks paths to progress. Romer seemed close to getting two charter cities in Madagascar, then things went pear-shaped:
Barely a year after launching his venture, Romer was on the brink of
a rare coup: a nation of 20 million people was about to embrace a
neo-medieval, neo-colonial scheme untested in the modern history of
development. But then a different sort of coup occurred–the kind of
coup, unfortunately, that underscores the obstacles to Romer’s project.
Even as Romer was meeting with Ravalomanana, the president’s main
political opponent was sniping at the proposed lease of farmland to
Daewoo, and the idea of giving up vast swaths of territory to
foreigners was growing increasingly unpopular. The arrangement was
denounced as treason, and public protests gathered momentum, eventually
turning violent… Soon, Ravalomanana was forced out of
I think Romer underestimates the danger that corrupt governments will “lease” land that other people already own. But all things considered, I’m on his side. The greater danger is that populist governments will exclude foreigners from turning empty land into the next Hong Kong.