TrendsVC Pro 0056 – Charter Cities

Description

TrendsVC Pro 0056 – Charter Cities

Poor governance works. For a few.
Benefits are concentrated. Costs dispersed.
Solution

Charter cities are new cities with better laws.
They go by many names: Special economic zones (Dubai Internet City), special administrative regions (Hong Kong) and countries (Singapore).
As Tyler Cowen says: “There are a lot more charter cities than we think. It’s just that the successful ones stop looking like charter cities.”
Players
Charter Cities
Nkwashi • A university-anchored city under construction in Zambia.
Próspera • A semi-autonomous zone on the island of Roatán. Built in partnership with Honduras.
Talent City • Located in Nigeria. It’s meant to be “…free of complex socio-political or economically protectionist considerations.”
Special Economic Zones
Shenzhen • Located near Hong Kong. China’s first special economic zone.
Mariel • A port located near Havana.

Centenary City • A planned city in Nigeria meant to rival Dubai and Singapore.
Tanjung Lesung • Located in Indonesia. Focused on tourism.
China–Belarus Industrial Park • Focused on high-tech manufacturing.
Special Administrative Regions
Hong Kong • The former British Colony transferred to China in 1997.
Macau • A former Portuguese colony with a separate governing system from mainland China.
Sinuiju • A region of North Korea experimenting with a market economy.
Yogyakarta • The only recognized monarchy within the government of Indonesia.
Organizations
Charter Cities Institute • A nonprofit aimed at improving the ecosystem for charter cities.
Creator Towns • An initiative to grow small towns by leveraging the digital economy.
Plumia • Billed as the first country on the internet.
Bluebook Cities • A group aimed at building cloud-first cities. Also behind Praxis.
Predictions
Remote work will lower switching costs between cities. Where we work and live are being decoupled. We’ll optimize for lifestyle and physical networks over offices.
Cities will compete for citizens. Miami’s Mayor makes a show of it. Governance options lead to more competition between jurisdictions.
Relocation incentive programs will become more aggressive. See the remote work report with 25+ relocation incentive programs.
Opportunities
Fight as few battles as possible. Consider relocating before building a new city.
Decide what to test. How much political autonomy do you need to:
Ban cars
Lower taxes
Legalize drugs
Reform education
Use ranked-choice voting
Institute an open container law
Legalize certain medical procedures
Start with problems, not policies. Don’t fetishize charter cities or seasteading. Think from first-principles.
Cheaply try ideas. Test governance models in cruise ships, DAOs, virtual worlds and temporary autonomous zones like Black Rock City (Burning Man).
Key Lessons
Experiments have positive expected returns. Most fail but some have asymmetric upside. We need more than 195 experiments.
Environment matters. We’ve seen natural experiments where culture, geography and other variables are controlled. Governance tips the scale.
Evolution needs variation and selection to work. We need more governance options and the ability to vote with our feet.

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