Reader Adam alerted me to a piece in The Atlantic on Charter Cities. Long-time readers will know I’m profoundly critical of Paul Romer’s ahistorical, acultural thinking on the idea, which reveals a basic lack of understanding about how cities, migration and laws actually arise and work.
The article is full of badly reasoned logic, too. It says that Romer has been criticized for his Charter Cities idea, but then defends him by saying that he came up with New Growth Theory. So what? Clever people have stupid ideas sometimes, and people who are expert in one field might turn out to be ordinary or worse in another.
A lot else in the piece, some of which comes direct from the mouth of Romer worries me. Here are a few quotes, the first of which Adam pointed out in his e-mail:
“In a sense, Britain inadvertently, through its actions in Hong Kong, did more to reduce world poverty than all the aid programs that we’ve undertaken in the last century,” Romer observes drily.
This is the closest that Romer comes out advocating colonialism outright. Never mind that my earlier criticism pointed out some of the hundreds of holes in his story about how Hong Kong came to be so successful, Romer is decided: Britain made Hong Kong successful by importing new rules. The fact that Hong Kong’s legal code took something close to half a century to evolve, and a further 20 years to be enforced correctly, is completely ignored. I know – my family are all lawyers, and some have been key players in the evolution of that legal code and witnesses to the creation of a police force and institutional structure to enforce it.
“Anything that involves land can be manipulated by people who want to rise up against a leader,” [Romer] began. “You have to find a place where there’s a strong enough leader with enough legitimacy to do this knowing that he’s going to get attacked. It narrows the options quite a bit. But we shouldn’t give up without trying a few more places.” In short, a disappointment with one client is no excuse for failing to pitch other ones. Any entrepreneur knows that.
So, in other words, the only kind of places where a Charter City might actually work are where the Government is strong, has a legitimate leader, and able to resist opposition. Sounds like the kind of Government that least needs a foreign power to come in and govern a city for them.
When you listen carefully, you realize that much of what Romer is saying should not be controversial. A few development economists argue that geography is destiny, but most share Romer’s conviction that decent rules are paramount.
Another worrying statement. The problem is not that economists think that rules are important. The problem is that they are not independent entities. They do not exist in a vacuum, apart from the culture, history, geography, and so on they relate to. Romer’s approach is wrong not because he thinks rules are important or that countries should invite rich Governments to enforce them, but because Romer thinks he already knows the rules, and that they can be imported anywhere. That’s not how it works. In a recent post I pointed out how different rich countries are from each other. That’s partly because their rules, evolved over hundreds of years in some cases, are specific to each of their own contexts. Romer doesn’t see this. He just sees the rules of today, and imagines that they can be peeled off a society and pulled over a new one, like a one size fits all t-shirt.
Finally, one of the old clichés:
But when African teenagers do their homework under streetlights, isn’t Romer right to think the unthinkable?
Romer is right to think outside of accepted conventions, of course. But when his ideas are so misshapen, so at odds with the reality of the world, no amount of poverty in the world justifies their continued advancement.