Despite the many proponents of the idea, no charter city has been successfully implemented. EKO ATLANTIC

The Blank Slate Fantasy The Promise and Pitfalls of International Charter Cities

May 10, 2021April/May 2021

International charter cities, a concept of autonomous cities popularized by American economist, Paul Romer, remain purely theoretical. Despite the many proponents of the idea, no charter city has been successfully implemented.

On 23 September 2020, anyone tuned into Nigerian Twitter was treated to an interesting thread about two Americans and their adventures across West Africa trying to build a new city. In the since-deleted thread, Dryden Wilson Tate Brown recounted how a sense of adventure and knowledge gained from reading ‘every book he could find’ drove him and his startup, Bluebook Cities, to meet with high level officials in Nigeria and Ghana. Perhaps predictably, Brown’s story was met with derision. Many critics pointed out that the pair’s whiteness and American citizenship granted them funding and access that would not have been accessible for Black African entrepreneurs. Others took issue with Brown’s limited knowledge of the region he aimed to work in and his use of harmful stereotypes about African cities.

Initiatives like Bluebook Cities spring from the concept of the international charter city, an idea popularized by American economist, Paul Romer. Romer advocated for governments of developing countries to create charter cities in which the laws and institutions of the home country could be replaced by those of more developed countries. Romer and his proponents argue that these cities should be purpose-built on ‘unused’ land in order to be free from ‘existing baggage’. By creating zones of economic security within supposedly ‘failed’ states, these cities could spur development for the whole country and create opportunities for the unemployed. They would operate autonomously of the state government, adopting best practices from jurisdictions around the world.

International charter cities in the Romer model remain purely theoretical, none have been successfully implemented. Nonetheless, it is an idea with many proponents. The Seasteading Institute, founded in 2008, has been sponsoring entrepreneurs looking to create charter cities on floating man-made islands. Brown cited both Romer and the Seasteading Institute as inspirations for his company’s desire to build a city in West Africa. Dr Gbenga Oduntan, a Nigerian lawyer and academic, has written that the purpose-built Eko Atlantic should be structured as a charter city to take full advantage of its potential.

But could charter cities actually work? In 2010, Paul Romer was approached by the government of Honduras to guide the development of its Zone for Employment and Economic Development (Zonas de empleo y desarrollo económico—ZEDE) in the model of his ideal charter city. Romer and other foreign experts were appointed to a transparency commission that was to oversee the project. However, this project ended with most members of the commission, including Romer himself, resigning in frustration. Construction has now stalled, and domestic and international critics have called out corruption in the development of the new city.

The reasons behind the failure of Honduras’s ZEDE illustrate the fundamental flaw behind international charter cities, and purpose-built cities more generally—the idea that one can start over in an environment free of context and baggage is ultimately a fantasy. In real life, there are no blank slates. Any effort to build new political or physical structures will need to contend with local context and existing institutions.

THE ALLURE OF STARTING OVER

In July 2019, I wrote an article in The Republic about the trend towards flashy, purpose-built cities in Africa. Despite ambitious rhetoric that these projects could transform the cities in which they were situated, I argued that they were more likely to fall victim to old urban problems that had afflicted past attempts at carving out elite enclaves. Building these new cities is costly, and the foreign investors who finance them can only recoup their investments if they cater to the luxury market. Since poor countries do not have enough demand for such housing, the result will be a lot of vacant units.

Moreover, the exclusive community to be developed in the new city is still dependent on the city left behind, just as the rich parts of the Island are still dependent on traders and labourers from the Lagos mainland. If these workers are priced out of the new city, they will be forced to squat in informal settlements or to commute by taxi, bus or motorbike, dooming Eko Atlantic to the same traffic problems facing the rest of Lagos. Finally, though the land reclaimed from the ocean is uninhabited, building on this land requires the displacement of tens of thousands of Lagosians who live in coastal areas along the new development, and defending the new land from the tides has implications for even more people who live in neighbouring areas.

The big picture is that while Eko Atlantic looks like a way to escape the complicated work required to improve the quality of life in Lagos as we have it today, Eko Atlantic cannot escape the realities of the city it is built upon. Its fate depends on the quality of infrastructure in Lagos and its successes will involve costs, many of which will be borne by residents of the old city. The same is true for similarly planned cities elsewhere.

COULD CHARTERS MAKE THE DIFFERENCE?

Proponents of charter cities argue that the problems above are avoidable if these new cities are given enough autonomy to adopt best practices from other countries. After all, other cities have made advances in housing, transportation and employment that could be imitated by African cities. According to Afrobarometer, 30 per cent of Nigerians have considered moving to another country, primarily for economic opportunities. This number goes up to 44 per cent for those with a university education. If other jurisdictions are so attractive to Nigerians, why not then replicate their institutions within the country in a way that is accessible to all? If run as a charter city, Eko Atlantic could ‘borrow’ the tax policy of a given US state, import property rights legislation from the United Kingdom and structure its police force on a Japanese model. The possibilities are endless.

Yet the optimism of these proponents betrays a misunderstanding of what institutions are. Institutions cannot be divorced from the politics in which they are sited, any more than our purpose-built urban developments can be kept isolated from the social ills of the surrounding cities. Development economists have long suggested that countries grow rich with stable institutions that encourage entrepreneurship and restrain government actors from corruption and predation. Yet these institutions are not inherently stable but are made so by the political culture of their jurisdictions. The United States, for example, has recently learned how toothless constitutional arrangements can be without the political will to enforce them.

A city charter for Eko Atlantic could only exist with the permission of the Lagos and Nigerian governments. Regardless of what paperwork both entities sign, their adherence to the principles of the international charter ultimately depends on their politics. If the Lagos government is predatory enough to pose a challenge to business owners in the current city, it is certainly predatory enough to decide to impose changes on a chartered Eko Atlantic.

In his work on political settlements, political scientist, Mushtaq Khan, argues that when a state’s political institutions do not match the underlying balance of powers, powerful actors will modify the institutions—through legal or extralegal means—to reflect their interests. The obvious implication is that institutions cannot be transplanted from one local context to another. A written rule saying ‘courts are stronger than governors’ will be ineffective in a context where governors have greater social and financial capital than judges. Rules guaranteeing freedom of religion are equally meaningless if the vast majority consider discrimination against a particular minority to be appropriate.

Changing political context requires a change in power, which can be achieved in ways ranging from gradual shifts in public opinion to protests or even political violence. Just as purpose-built cities promise to bypass the hard, unglamorous work of urban maintenance, efforts to borrow institutions attempt to avoid the tedious and often volatile work of real political change. Both promises should be viewed with scepticism.

For a practical application, let’s turn again to Honduras’s ZEDE. In the early stages of the project, Romer sought funding from Western governments. Instead, the government of Honduras signed an opaque agreement with a private company called MKG Group in 2012. The transparency commission, to which Romer and other foreign experts were appointed, was quickly sidelined in the aftermath of this agreement and most members resigned in frustration. In their resignation, Romer and his fellow board members lamented that ‘the usual corporate, autocratic interests’ within the Honduran government had derailed the project to corrupt ends.

In hindsight, this should have come as little surprise. President Porfirio Lobo Sosa, who invited Romer and his colleagues to supervise the project, had taken power in controversial elections in 2009 only months after a coup ousted his main political rival. Sosa’s presidential decree recognizing the transparency commission was challenged in court and never formalized, but the project went ahead anyway. It was obvious that the underlying balance of political power in Honduras was tilted in favour of the executive and whoever controlled the military. Neither a new city nor a signed piece of paper was going to change that fact. The experience of the ZEDE in Honduras suggests any arrangement made to distance Eko Atlantic from the challenges of doing business in Lagos/Nigeria would itself fall victim to those challenges.

REALISTIC EXPECTATIONS

Aside from the aborted attempt in Honduras, none of the current advocates for charter cities have succeeded in convincing governments to sign on to their vision. The Seasteading Institute has yet to launch any of the autonomous floating city projects it has sponsored and promoted. Nonetheless, there are some examples of other city organizations that suggest the conditions in which a charter city could work.

Long before Romer announced the concept of an international charter city, charter cities of a more limited variety were already quite common in some US states. These cities have freedom to decide on certain policies that are considered to only affect them. California’s largest cities are charters in this model, capable of choosing how they elect their leaders or how much to pay public officials without needing the state government to pass legislation. However, unlike the international charter cities being proposed for poor countries, these cities are still firmly under the jurisdiction of the state and federal government. They may not establish their own judiciaries or exempt themselves from federal laws. In this sense, they fall short of the utopian ambitions of the international charter city, but they have the advantage of not requiring a state to voluntarily bind itself to institutions that limit its sovereignty—something which is very unlikely. American charter cities have faced criticisms that they hinder cooperation and encourage segregation, but at least they do not pretend to escape from context. Hong Kong offers a very different model of what an international charter city might look like in reality. In some sense, all international charter city proposals are attempts to recreate Hong Kong’s success in different contexts. Yet, we must not forget that Hong Kong was once a colony. Its transfer to the British and exemption from Chinese institutions were enforced by British gunboats, in a manner that would be unconscionable to replicate today.

Finally, and most promisingly, there is a growing tradition of special economic zones (SEZs). Like international charter cities, SEZs attempt to imitate practices from other jurisdictions, but these focus on ad hoc policies rather than trying to recreate entire institutions. They act as staging areas to implement policies which governments recognize to be beneficial but consider disruptive if implemented across the state. For example, the United Arab Emirates (UAE) restricts the internet for most citizens but created Dubai Internet City as a zone with completely open internet in order to attract tech firms. China started SEZs in the 1980s wherein the usual features of the command economy were relaxed.

However, special economic zones are not miracle cures for failing states. China and the UAE had incredibly effective governments before their first experiments with SEZs. Rather than buying into the fiction of the blank slate, these SEZs built on generations of changes to the state’s existing institutions. By contrast, Nigeria’s efforts with Lekki Free Trade Zones (LFTZs) has been frustrated by the same institutional problems holding back Lagos State as a whole. Projects in the zone were limited by poor connectivity of existing road and pipeline infrastructure. The state’s reluctance to share profits with residents of the community contributed to instability. When SEZs work, it is because they identify specific technical problems and build on the hard work already underway in the wider society.

TECHNICAL SOLUTIONS, POLITICAL PROBLEMS

Support for international charter cities has faded slightly from its heyday, partially due to limited interest from potential host governments. Nonetheless, the idea still has its proponents, as evidenced by Bluebook Cities and similar startups. To be sure, there are technical solutions to many of the problems facing poor countries around the world. It is often reasonable to apply best practices from other countries that have successfully managed these urban problems. By and large, however, poverty, corruption and insecurity are not just technical problems that can be solved by copying the ‘right’ institutions from rich countries. They are political problems, which persist because they work to the advantage of powerful actors both domestically and internationally. Struggles to change political power are perhaps less glamorous than the promises of transformative new developments financed by foreign investors, but they are necessary given the impossibility of finding a truly blank slate

The views, thoughts, and opinions published in The Republic belong solely to the author and are not necessarily the views of The Republic or its editors. We want to hear what you think about this article. Submit a letter to the editors by writing to [email protected]

is a PhD Candidate at the University of Toronto’s Department of Political Science, where he studies local democracy and urban development in Africa. He has worked as program staff for democratic governance projects in West and Central Africa, particularly Nigeria.

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