Replace overseas military bases with Charter Cities

by Yameen Huq July 3, 2021

On the 4th of July, Americans remember not only their nation’s founding, but its accomplishments in economics, politics, and culture. A new survey on international opinions shows that people abroad also have strongly favorable views of the United States, with over 60% saying they had a positive view of American products, entertainment, and education. However, they had far less favorable views for U.S. military collaboration, believing that it does not promote regional stability.

If people abroad value American culture and economics more than deep military engagement, then Congress should shift to a grand strategy that capitalizes on that belief. It should enable the State Department to replace bases in low-income countries with charter cities – cities that use American capital and governance to promote growth and share tax revenue with partnering hosts. This will expand influence through cooperation by providing those abroad with good policies, growth, and institutions.

The problem with military bases

Grand strategy is about achieving foreign policy ends through two means: coercion and cooperation. Since the post-WWII era, America has deployed a strategy using the former to achieve its goals of security and prosperity. A key instrument in pursuit of these ends is America’s network of over 800 military bases to deploy troops and maintain peace.

Unfortunately, this approach has costs that outweigh the benefits. Economically, it costs over $150 billion annually on maintenance alone; money that could instead be invested in the hosts themselves to build prosperity. Second, these bases have been used to launch dozens of wars that have led to the death of millions. Politically, many of these bases are also maintained in undemocratic, stagnant states such as Niger and Turkey. Finally, these bases often generate environmental waste on the host’s land.

The benefits of the base network are simultaneously overstated. Interstate conflict has declined since the end of the Cold War and new technologies allow rapid deployment even without bases. A fixed security investment in an authoritarian regime ties America’s hands to that regime. This in turn can incentivize more human rights violations, such as the case in America’s support for Uzbekistan. As the survey above shows, these bases can also fuel local resentment over what is seen as an occupying presence.

The art of persuasion

While closing some bases would both save money and reduce America’s ability to go into costly wars, America still needs an alternative tool to deploy in pursuit of peace and prosperity. Instead of coercion, the US should shift towards soft power, the ability to persuade nations through values and achievements.

Soft power matters because when it works, it’s cheap. Resources invested into soft power are typically resources a country should be investing in anyway, such as trade, infrastructure, and knowledge. The goal of foreign policy is to determine how best to leverage power in persuading other nations. Historically, soft power included "bringing in" and "public diplomacy". "Bringing in" involved actions such as expanding immigration, developing investment opportunities, and inviting foreign students. "Public diplomacy" was a way for states to engage in effective branding, communication, and engagement with other countries to create a favorable national image.

While "bringing in" is an effective domestic strategy for supporting foreign policy and "public diplomacy" helps optimize existing strengths and successes, a "bringing out" strategy can achieve goals the previous two options cannot.

Charter cities as an alternative

A successful alternative to America’s deep military engagement would be cost-effective, reduce risks, promote liberal politics, and support sustainability. Charter cities can do all four.

Charter cities are joint agreements between two countries to develop a new city on the host country’s land. They contain four key ingredients:

  1. A greenfield city on uninhabited land
  2. Autonomous governance independent of the host country
  3. Pro-growth economic regulations
  4. An independent civil law system

These features are important because economic growth is contingent on effective ‘state capacity’: the ability of political institutions to deliver public services, support markets, and uphold the rule of law. Low-income countries often lack state capacity due to corruption, institutional decay, or instability.

The charter city is an opportunity for a frustrated host country to outsource governance to countries with preexisting state capacity. The contract lets a foreign country build a new city using its own capital. It then governs the city using its preferred institutional design for the duration of contract with a possibility of renewal. This city would be open to any host resident that wants to live there. A percentage of the tax revenues collected from the city would go to both the foreign and host country, thereby incentivizing the host to respect the city’s autonomy and incentivizing the contractor to do a good job. By outsourcing governance to a more well-run country, the host can ensure the city has better policies.

An example of this approach is Hong Kong, a Chinese city that was leased to Britain until 1997 and will continue to be governed by British institutions until 2047. During this time-period, Hong Kong adopted British political, legal, and economic institutions to become richer than the rest of China. It developed a full-fledged free-market and robust legal system to go from poverty to prosperity despite being a small community with no resources beyond its harbor.

Hong Kong’s current conflicts are tied to its move away from charter city status. The city’s political and social future rose in salience once it was no longer under an independent authority. Conflicts between pro-democracy local forces and the authoritarian Chinese Communist Party increased after Britain officially handed over city. This unresolved tension between whether Hong Kong should be a sovereign democracy or fully integrated into China is unlikely to end under current conditions. A return to charter city status under management by a neutral, high-income country would defer the question to a later date, allow external mediation, and reduce the temperature of current social conflicts.

Reimagination, not retrenchment

A shift from bases to charter cities reduces overall costs since money invested into the cities generates revenue for both America and the host nation. By raising the cost of troop deployment, it also reduces the likelihood of war – especially in areas such as the Middle East. By stimulating growth, charter cities can build the middle-class in low-income countries; an ingredient for inclusive democracy and better foreign relations. The US could also mandate that charter cities are built sustainably. This would promote inclusive growth and assist in green technological spillovers to support the host’s industrialization.

While the President can unilaterally close overseas bases, it would be a stronger step for Congress to codify not strategic retrenchment, but strategic reimagination. Critics accuse charter cities of colonialism because they introduce foreign institutions into the host, thereby undermining the host’s sovereignty. But colonialism is governance by force; it extracts resources unilaterally out of a victim country. Charter cities require consent from the host, are built on uninhabited land, rely exclusively on outside capital, and share tax revenue jointly. The host would be the unequivocal principal of the city, while America would operate as management. Additionally, by starting charter cities first as a replacement for existing bases, the charter model represents a shift towards greater sovereignty for the host nation, which has little authority over bases.

A soft power strategy using charter cities can shift foreign policy in a cost-effective, collaborative direction that helps America and its partners. It would build prosperous new cities that generate wealth for the Global South and create new opportunities for American business. Congress should authorize this process and deliver what the rest of the world loves most about America.

Yameen Huq is a Marcellus Policy Fellow at the John Quincy Adams Society. He holds a Master's in Cybersecurity with a focus on technology policy.

Related Posts