One radical idea promoted by none other than the chief economist of the World Bank is charter cities, whole new cities built on uninhabited land and governed by their own rules designed to unlock innovation and productivity. It may be an infrastructure provider’s dream but it also raises challenging questions about governance, migration, democracy and physical space.
Paul Romer was appointed as the World Bank chief economist in July 2016. A highly respected economist and entrepreneur, Romer is tasked with supporting the World Bank in inspiring transformative change at a time when the global landscape is experiencing new technologies, globalisation and demographic shifts. He is one of Time Magazine’s “25 most influential Americans”, and is often mentioned as a future Nobel prize-winner particularly because of his expertise around why and how economies grow.
Romer is also a professor at New York University (NYU), Director of NYU’s Marron Institute of Urban Management, and a professor of economics in NYU’s Stern School of Business. His distinct combination of skills positions him uniquely to contribute to the cities debate. Amongst others, he has pioneered the concept of “charter cities”. His deep understanding of how cities work and what civic innovators can do to improve city management led to this concept, which is essentially the notion of a “start-up city”: the opportunity to identify the particular needs of an area or community and start a city from scratch to address that.
Two of the most interesting precedents for charter cities are Shenzhen and Hong Kong, not only because they grew from very modest villages, but because the way they were designed has allowed them to play a pivotal role in reforming the Chinese economy. However, Romer is of the opinion that this approach can be used in any country that is looking for ways to reform cities. The idea is particularly viable in developing countries, but he argues that a charter city can also be pursued in the developed countries of Western Europe, North America and so on.
It is worth taking a deeper look at his ideas: where they make sense and their impacts on economies and people.
There is a burgeoning demand for city living. In 2014 the United Nations estimated that some four billion people on earth lived in cities, and it predicted that by 2045 the world’s urban population would surpass six billion.1 The UN believes the largest urban growth will take place in India, China and Nigeria: these three countries will account for 37% of the projected urban population growth to 2050, creating huge demand for public transportation, housing, electricity, water and sanitation.
UN Habitat also estimates that urban areas generate 70% of global GDP. In other words, that is where the jobs are. As a consequence, the draw of people into cities is enormous. So instead of putting increased pressure on a city’s infrastructure, Romer argues that a charter city gives you the ability to simply create a new one. It is provocative in its simplicity, but can it work?
Lengthy consultation delays are always a challenge in proceeding with complex projects and, with the pressure to establish new cities, we may not have that luxury. The charter city approach is different. Instead of trying to reach consensus amongst many stakeholders, a charter city model enables you to create something new, giving residents and businesses the option of living under the city’s rules, which are embodied in the “charter”, a document that stipulates the founding principles of the city and how it will be run. You have the option to move to the new start-up city if you agree with the founding principles, and if you don’t, you simply do not relocate.
Besides citizens, investors and companies will be opting in to the new city. With a blank slate, infrastructure and public services are planned, built and operated for 21st century conditions, as opposed to trying to rebuild existing infrastructure systems within a city that is already bursting at its seams.
The current world population of 7.6 billion is expected to reach 8.6 billion in 2030, 9.8 billion in 2050, the UN predicted in June this year.2 Interestingly, however, from 2017 to 2050, it is expected that half of this population growth will be concentrated in just nine countries: India, Nigeria, the Democratic Republic of the Congo, Pakistan, Ethiopia, Tanzania, the US, Uganda and Indonesia (ordered by their expected contribution to total growth).
To accommodate all these new souls, there are basically only two options – start new cities or expand existing ones. In Romer’s view, the attempt to expand cities is beset with problems. In theory, cities can expand upwards and downwards but these options are limited by technical and cost constraints. The path of least resistance has been horizontal sprawl, with centres de-densifying through suburbanisation. However, this needs careful managing, lest suburb-dwellers find themselves isolated from work, schools and other basic services and opportunities. With poor public transport, people are forced into cars which worsens congestion, pollutes the air and increases the per capita carbon footprint. Life can become stressful, with residents more prone to ill-health. New arrivals, intent on bettering their lot, simply end up facing greater problems.
Building a city from scratch could unleash innovation in governance in a way one sees in technology related industries, for example, where new start-up firms are able to enter the market and change the game. The way that the “new” city is managed and governed can be engineered to accommodate the particular social and economic needs of emerging community and business groups. Charter cities provide the opportunity to experiment with modalities that would be unacceptably “radical” in the “parent city”. What about a totally autonomous vehicle-dependent city, or a professional services-only city where all workers work from home, or “telecommute”? In the same way that tech start-ups have changed the way people communicate, charter cities could completely change the way people live and work.
There is also a great deal of scope to provide a higher standard of living with a charter city. Starting from scratch seems to hold out the possibility of finding better ways to provide government services, or change their mix, without incumbent stakeholder vested interests. Brand new cities can accommodate new entrants, because everybody is a new entrant. Now, existing residents are often well served but new entrants, be they migrants or just movers, are often pushed to the periphery. Dealing with new entrants is worth noting, particularly as the world faces greater numbers of political and economic refugees, with the looming potential for environmental refugees. Many European cities are currently feeling the enormous burden of accommodating huge numbers of new residents. It may be that the creation of charter cities could address this.
While there is something appealing about Romer’s bold vision, it does raise challenging questions about governance, migration, and physical space.
In terms of governance, Romer’s proposition is that if we get our cities right, we get our nations right – and hence the focus on cities rather than on addressing issues at country scale. Giving cities more say in governance is an idea currently doing the rounds. In his book, If Mayors Ruled the World (Yale University Press, 2013), social economist Benjamin Barber maintains that national politics are dysfunctional and that governing through networks of city mayors is preferable. While it can be argued that city leaders are closer to the local impacts of globalisation, are more in touch with their constituents’ cultural and religious diversity, and are conceivably better able to respond with precision to emerging problems, it could be over-stretching to assume these local capabilities can necessarily be scaled up to network and national level.
Charter cities could also lead to a dissonance in national governance that may be hard to resolve. Citizens may be asked to forego rights and privileges to live in what is, in effect, a foreign enclave. It may not be the national government that draws up the “charter”, but corporations or foreign governments. If national law doesn’t apply in the new city, citizens may see their link to host-country democratic and legal processes weakened. If they don’t like it, they can leave, but that assumes they have the economic means to re-establish themselves elsewhere with no life-changing hardship. We should be nervous about charter cities’ potential to exacerbate social and economic inequity in a country, as well. One can envisage a situation where chartered cities could become vast, private gated communities for the rich and highly skilled on one hand, or factory dormitories for the poor on the other.
As for migration, while charter cities may offer people more choice about where and how they live, we should reflect on whether untrammelled global freedom of movement is necessarily a good thing. In many developing countries governments are already battling to hold onto their most talented citizens.
Across the globe, people move from one area to another in times of political and economic crisis. Setting up charter cities, which people could enter or leave at will, might lead to volatile migration patterns, the sudden decanting or filling up of cities. After investing in new infrastructure, charter cities could see their residents leaving as new, more attractive, reforms are proposed somewhere else. Without deep cultural and family ties to a city, it would be easier to leave than ever before.
Finding space for greenfield charter cities able to accommodate millions of new residents is also a challenge. And it is not about space alone, because in order to retain economic and social connections, that land would need to be in reasonable proximity to established centres. Charter cities would need to invest in the transport systems and infrastructure that could keep residents connected to bigger cities. As is the case with India’s Palava City, the residents still need quick and easy access to Mumbai in order to find some form of work.
Our cities are facing substantial challenges, there is no doubt. The charter city approach gives government and planners a chance to look beyond the status quo and create new solutions that are effectively purpose designed. This is appealing considering the complexity of the problems cities face. But successful cities have tended to evolve over time in response to changing economic, technological, social and political trends. The process is complex, interdependent and mysterious, and planners and policy-makers can only really gain a holistic understanding of what is happening after it has happened. As attractive as the concept is of starting from scratch, the consequences of the top-down imposition of new rules and modalities, and of encouraging particular groups to live in a certain area, are unknown. It could create more problems than it solves.
While creating a fresh city on a blank slate sounds like a dream come true, what of the argument that we should instead invest in simply bringing more smarts to our current cities, making them more intelligent, liveable and adaptable? Sensors embedded into intelligent infrastructure and the Internet of Things offer a vision of cities as things that can think, feel, self-regulate and self-modulate.
Multinational tech companies such as IBM, Microsoft, General Electric, Siemens, Oracle and Google are pouring billions of dollars into solving the most wicked urban problems such as congestion, social inequality and exposure to natural disasters. This is focused on both developed and developing countries, and could make our current cities better, avoiding the need to build new ones.
Instead of looking to create new cities from scratch, a more logical next step might be an evolution to smarter, more intelligent cities. American urban strategist Boyd Cohen makes a call for cities to evolve into what he terms ‘smart city 2.0’. An evolutionary step up from the tech drivers behind the current iterations of “smart cities”, 2.0 sees more thought put into the intelligence installed in cities to ensure the technology solves real-world issues that matter to residents. Beyond this, their intelligent systems are connected and the information is utilised and processed so that the city becomes a highly functional, self-learning and self-modulating organism capable of responsive behaviour.
Article originally appeared in Taylor & Francis and has been shared with permission.
1United Nations. July, 2014. “World Urbanization Prospects: The 2014 Revision.” https://esa.un.org/unpd/wup/Publications/.
2United Nations. “2017 Revision of World Population Prospects.” https://esa.un.org/unpd/wpp/