Amanda Porter
Paul Romer’s case for charter cities put forth as the solution to creating new rules and enabling progress that keeps pace with new technology is an interesting and radical alternative to other incremental frameworks for and explanations of change. Yet, in its current form the charter city concept is fraught with unaddressed issues and remains ultimately un-replicable and, for the most part, not feasible. Beyond the critiques that this approach is colonial and anti-democratic, the framework laid out in Romer’s essay lacks nuance and has several issues that would need to be explored and addressed in a serious way before it could be a realistic alternative to incremental change. As the lead precis describes, Allison and Zelikow’s “organizational behavior model” includes a fair amount of inertia, where organizations make decisions based on ones that were previously made. Perhaps Romer’s “charter city” model is an attempt at a departure from this. However, while Romer’s essay is filled with bold ideas about how copying good rules will lead to progress, he lacks the evidence to back up those claims and fails to acknowledge the social, political and historical context that may complicate his claims. Even if a nuanced discussion of how this charter city model could work in practice was not the intent of his essay, it still leaves us with important questions to consider in the potential utility of his concept.
While Romer makes arguments about the awesome power of new rules and new technology to enhance living standards, he does not explain the process by which this transformation takes place and seems to base his whole claim on the assumption that technology automatically leads to progress in terms of increased well-being—as long as the rules can keep up. For example, he claims, “Sharing also means that developing economies that copy existing technologies will see their living standards converged with those in developed economies” (pg. 2). This claim seems grossly simplified. In fact there are bodies of literature and empirical work that would dispute this claim that simply enhancing technology will increase living standards and certainly the process of enhancing technology does not lead to convergence. In this statement Romer ignores many important factors that could impede or constrain this process or conversely, are necessary to facilitate the process like: the type political systems in place in a country (to create and uphold good rules), organizational capacity (to develop, sustain and distribute this technology), economic structures of a country, inequality, ethnic tensions, education levels of the country’s citizens, gender inequality, natural resources and infrastructure, among others.
If his discussion of rules is meant to address how countries will get from point A—copying existing technologies—to point B—living standards converged with those in developed countries—then he leaves many gaps in his logic and argument. Throughout Romer’s essay he uses the term “good rules” arguing that developing countries should not “reinvent the wheel” and instead should copy “good rules” from developed nations. First of all, the term rule itself is ambiguous. At times it seems that Romer conflates rules with public policy, like when he provides the example of individual tradable quotas (ITQ) as an example of a good rule that came about after a period of experimentation with trial and error (pg 6). At other times he uses rules in reference to decisions or strategic choices made by private companies, like when Apple came out with a new set of rules that allowed for consumer consumption of computers (pg 8). Finally, there are meta-rules or “rules for changing the rules” an interesting and well defined concept introduced by Romer to explain how people could opt into the new systems and “good rules” created by the charter cities (pg 7-8). However Romer doesn’t address the following questions: how does one define what makes a rule “good” and who is defining what rule is good? Does the definition of a good rule change if it’s the policymakers evaluating and defining “good” rules versus an autocratic leader or a democratic process deciding which rules are good and should be adopted?
Furthermore, it seems that the success of a rule that is “good” or proven effective in one socio-economic and geographic space, does not always work when transported to a different country. For example, rules that work well in New York City may not have the same results or would likely need to take a different form when implemented in Mexico City. Additionally, I think the historical context in which these charter cities are created would be important. Throughout his piece Romer points to the creation of Hong Kong and the consequent Chinese adoption of new rules created there as a positive example of how the charter city could work. However, he also admits that this was an accident, a creation born out of a specific historical (and colonial) moment in time. Would this process work differently if this was a planned and purposeful creation of a city? Would administration of a city from an outside country always lead to positive change?
I would argue that no matter how close the geographic distance between countries or how small the political difference, each country and even each city has its own set of both formal and informal rules that it plays by and therefore cannot easily be copied or transferred from one context to the next with the same results. To this point, Romer asks “What types of mechanisms will allow developing countries to copy the rules that work well in the rest of the world? (pg. 3) but the creation of a charter city alone does not seem enough of an answer. Maybe the question should instead be: What type of mechanisms will allow development countries to create their own, innovative rules that will work well in their particular country, given a set of resources, unique assets, capacities and constraints? Even a new city with new rules would not operate with a clean slate or in isolation. Romer explains that the city could be autonomous but administrators would ultimately be accountable to elected leaders of the country. Moreover, the social norms, organizational, political and economic structure of that country as well as the city’s interactions on a global level will definitely shape the types of rules that are able to be adopted and the way in which they are implemented.
Finally, the essay fails to discuss the moral and ethical concerns attached to the creation of charter cities and the consequences it would have on human lives if these the charter city experiment failed. Even if a country could convince citizens to opt into the charter city and its new rules, if the city did fail, the human migration, reintegration and overall uprooting of lives does not come without cost. While I can appreciate the idea of starting cities from scratch to implement and incubate new rules and ideas that have been proven effective in other contexts; ultimately, if this model were to work decisions must be made on a very tailored and individualized basis and it is definitely not a one size fits all solution.
Paul Romer’s case for charter cities put forth as the solution to creating new rules and enabling progress that keeps pace with new technology is an interesting and radical alternative to other incremental frameworks for and explanations of change. Yet, in its current form the charter city concept is fraught with unaddressed issues and remains ultimately un-replicable and, for the most part, not feasible. Beyond the critiques that this approach is colonial and anti-democratic, the framework laid out in Romer’s essay lacks nuance and has several issues that would need to be explored and addressed in a serious way before it could be a realistic alternative to incremental change. As the lead precis describes, Allison and Zelikow’s “organizational behavior model” includes a fair amount of inertia, where organizations make decisions based on ones that were previously made. Perhaps Romer’s “charter city” model is an attempt at a departure from this. However, while Romer’s essay is filled with bold ideas about how copying good rules will lead to progress, he lacks the evidence to back up those claims and fails to acknowledge the social, political and historical context that may complicate his claims. Even if a nuanced discussion of how this charter city model could work in practice was not the intent of his essay, it still leaves us with important questions to consider in the potential utility of his concept.
While Romer makes arguments about the awesome power of new rules and new technology to enhance living standards, he does not explain the process by which this transformation takes place and seems to base his whole claim on the assumption that technology automatically leads to progress in terms of increased well-being—as long as the rules can keep up. For example, he claims, “Sharing also means that developing economies that copy existing technologies will see their living standards converged with those in developed economies” (pg. 2). This claim seems grossly simplified. In fact there are bodies of literature and empirical work that would dispute this claim that simply enhancing technology will increase living standards and certainly the process of enhancing technology does not lead to convergence. In this statement Romer ignores many important factors that could impede or constrain this process or conversely, are necessary to facilitate the process like: the type political systems in place in a country (to create and uphold good rules), organizational capacity (to develop, sustain and distribute this technology), economic structures of a country, inequality, ethnic tensions, education levels of the country’s citizens, gender inequality, natural resources and infrastructure, among others.
If his discussion of rules is meant to address how countries will get from point A—copying existing technologies—to point B—living standards converged with those in developed countries—then he leaves many gaps in his logic and argument. Throughout Romer’s essay he uses the term “good rules” arguing that developing countries should not “reinvent the wheel” and instead should copy “good rules” from developed nations. First of all, the term rule itself is ambiguous. At times it seems that Romer conflates rules with public policy, like when he provides the example of individual tradable quotas (ITQ) as an example of a good rule that came about after a period of experimentation with trial and error (pg 6). At other times he uses rules in reference to decisions or strategic choices made by private companies, like when Apple came out with a new set of rules that allowed for consumer consumption of computers (pg 8). Finally, there are meta-rules or “rules for changing the rules” an interesting and well defined concept introduced by Romer to explain how people could opt into the new systems and “good rules” created by the charter cities (pg 7-8). However Romer doesn’t address the following questions: how does one define what makes a rule “good” and who is defining what rule is good? Does the definition of a good rule change if it’s the policymakers evaluating and defining “good” rules versus an autocratic leader or a democratic process deciding which rules are good and should be adopted?
Furthermore, it seems that the success of a rule that is “good” or proven effective in one socio-economic and geographic space, does not always work when transported to a different country. For example, rules that work well in New York City may not have the same results or would likely need to take a different form when implemented in Mexico City. Additionally, I think the historical context in which these charter cities are created would be important. Throughout his piece Romer points to the creation of Hong Kong and the consequent Chinese adoption of new rules created there as a positive example of how the charter city could work. However, he also admits that this was an accident, a creation born out of a specific historical (and colonial) moment in time. Would this process work differently if this was a planned and purposeful creation of a city? Would administration of a city from an outside country always lead to positive change?
I would argue that no matter how close the geographic distance between countries or how small the political difference, each country and even each city has its own set of both formal and informal rules that it plays by and therefore cannot easily be copied or transferred from one context to the next with the same results. To this point, Romer asks “What types of mechanisms will allow developing countries to copy the rules that work well in the rest of the world? (pg. 3) but the creation of a charter city alone does not seem enough of an answer. Maybe the question should instead be: What type of mechanisms will allow development countries to create their own, innovative rules that will work well in their particular country, given a set of resources, unique assets, capacities and constraints? Even a new city with new rules would not operate with a clean slate or in isolation. Romer explains that the city could be autonomous but administrators would ultimately be accountable to elected leaders of the country. Moreover, the social norms, organizational, political and economic structure of that country as well as the city’s interactions on a global level will definitely shape the types of rules that are able to be adopted and the way in which they are implemented.
Finally, the essay fails to discuss the moral and ethical concerns attached to the creation of charter cities and the consequences it would have on human lives if these the charter city experiment failed. Even if a country could convince citizens to opt into the charter city and its new rules, if the city did fail, the human migration, reintegration and overall uprooting of lives does not come without cost. While I can appreciate the idea of starting cities from scratch to implement and incubate new rules and ideas that have been proven effective in other contexts; ultimately, if this model were to work decisions must be made on a very tailored and individualized basis and it is definitely not a one size fits all solution.