This is a good, comprehensive overview. Some comments
The report starts by saying, “”Rethink Priorities has been piloting expanding into human-focused neartermist global priorities research.” Charter cities should be viewed as a midtermist position. The time horizon is longer than malaria nets, de-worming, cash grants, etc. The time horizon is closer to AI safety, bioweapons, etc, and should be measured in decades.
Chinese growth, which resulted from special economic zones and urbanization, is the greatest humanitarian miracle in the post-war era, lifting 850 million people out of poverty. The charter cities movement is the only group trying to replicate that success. That deserves at least ~1% of EA time and attention imho.
Special economic zones (SEZs) are not the right comparison. A city is the smallest unit that can sustain economic development.
SEZs have four important differences with charter cities
Size: Most SEZs are geographically small, <1000 acres. Charter cities are cities and require tens of thousands of acres
Reforms: Most SEZs have weak reforms, tax breaks, one stop shop, etc. Charter cities create a new legal environment from the ground up
Industry: Most SEZs are single industry, electronics, textile manufacturing, etc. Charter cities are cities, with a multitude of industries and supply chain linkages
Administrative autonomy: Most SEZs have limited administrative autonomy, the rules come from the government. Charter cities have a wide degree of delegated authority to respond to changing conditions on the ground.
With these differences, Shenzhen is closer to a charter city than SEZ. In 1980 it was >320 sq km and had significant devolved authority, “Except for the railway, post and telecommunications, banking, civil aviation, and national defense, all other management authority was delegated to the provincial government”
A recent edited volume by Siqi Zheng is a better guide to thinking about charter cities than the SEZ literature. She reviews new cities, urbanization, special economic zones, and industrial parks in China.
“If we consider large industrial parks as the seeds of new, so called consumption cities that develop around them, China has built 1568 national level and provincial level industrial parks in 270 municipalities since 1998 which account for 10% of China’s GDP and 33% of its foreign direct investment” (p12). This has many parallels to our discussion of industrial parks as anchor tenants for charter cities.
Admittedly, there are important differences between SEZs in China and potential charter cities in Africa. China had more state capacity, had more restrictions on markets, had fewer ethnic differences, etc. However, even if the success is an order of magnitude lower, that means lifting 85 million people out of poverty.
Charter cities are more tractable than people think
A decade ago Romer got the Madagascar president interested in charter cities and legislation passed in Honduras. The legacy of the Honduran legislation is ‘charter towns’, like Prospera and Ciudad Morazan, too small at the moment to be described as cities. It’s possible to imagine an alternative history where Romer got traction earlier.
The recent successes in Honduras should cause folks to update their priors
Cities are hot, according to journalist Wade Shepard there’s over 200 master planned cities being built right now. There’s Akon City, Lanseria, Enyimba Economic City, and many more. Few, if any, of the cities can be considered charter cities. However, it’s possible to imagine the energy and political will for new cities being harnessed for charter cities.
The Charter Cities Institute has seen a marked uptick in interest, over the last few years, as well as over the last few months. We’re working with two governments on charter cities legislation and see a strong pipeline of charter cities projects that should start making public milestones in the next year or two.
In short, there are many good reasons for EAs to pay more attention to charter cities.
Thanks Mark, both for your time and feedback while we were writing the report and your comments now.
On 1, I agree that charter cities sit somewhere between neartermist and longtermist so thinking about them as mid/mediumtermist makes sense. I imagine Rethink Priorities’ future work in this space will be a mixture of traditionally neartermist and mediumtermist topics. However, most of the current arguments for charter cities, especially Mason (2019), have an explicitly neartermist flavour, given the direct comparisons to GiveWell charities and a focus on the direct benefits. I’m keen to see robust medium/longtermist arguments for charter cities being made more explicitly.
On 2 & 3, there’s some tension between the claims that (1) Chinese growth is a result of SEZs, (2) the charter cities movement is trying to replicate the success of China, and (3) that SEZs are not the right comparison for charter cities.
To simplify the argument somewhat, we are taking the position that the more useful currently existing empirical analogue for charter cities is all SEZs, whereas your position is that it is Shenzhen. I totally accept your points about the important differences between SEZs and charter cities, however I am still concerned that focusing solely on the Shenzhen SEZ is cherry picking and an unrepresentative sample of how we might expect charter cities to perform. I think the ideal empirical analogue would be the subset of all SEZs that were large, had relatively high autonomy and multiple industries, however we couldn’t find any analysis of the performance of this subset.
On 4, I think the report is clear about why we are currently skeptical of the tractability of charter cities despite recent history (although I recognise that you have inside knowledge that might cause us to update more positively). I’d also highlight that regardless of what you think of the absolute tractability of charter cities, it seems intuitive that the relative tractability is lower than alternatives such as special reform zones, which aim at delivering the same benefits as charter cities without having to set up and build a brand new city. That said, I’m happy you and CCI are still working on this and I would love for you to prove us wrong!