Charter Cities and the Benefits of Global Migration

Charter Cities recently ran an oped in an online German publication called The European. Here is the English language translation:

In too many places, weak or misguided rules hold people back. If people could migrate to better rules, they could improve their lives and, by their own actions, do much to reduce global poverty.

For example, even before the earthquake, ineffective rules in Haiti kept private firms from selling power to households and firms, so electricity there is expensive. Ineffective policing meant that crime was high. Firms that would be willing to hire Haitians would not go to Haiti. Firms that used to hire Haitians left. As a result, a worker can earn over 7 times more by leaving Haiti and coming to the U.S.

Gallup reports that 700 million people would like to move permanently to another country if they had the chance. They don’t because voters in the destination countries often oppose immigration in large numbers. Understanding and addressing this opposition is an important challenge, but people needn’t remain stuck with ineffective rules in the interim. Charter cities can quickly create an opportunity for millions of people to move to places with better rules—the types of rules that will help to ensure that they can send their kids to school, keep their families safe, and find employment at a wage that more accurately reflects the value of their work.

A charter city starts with a vacant and voluntarily provided piece of land large enough to hold a city, a charter which specifies the rules that will apply in this new region, and a commitment that potential residents can freely move in to or out of the city. The people, employers, and investors will follow, attracted by the chance to work together under the rules that the charter specifies.

There are three distinct roles for participating nations: host, source, and guarantor. The land is provided by a host country. The people who choose to live in a charter city come from a source country. The guarantee that a charter will be respected and enforced for decades into the future comes from a guarantor country.

A country such as India could assume all three roles, providing the land, people, and guarantee much as China did in establishing special economic zones similar to the one where the city of Shenzhen grew up in just a few decades. New cities might offer another track for the Indian government to use in parallel with the existing process of building political consensus for new rules in its existing cities.

Kenya’s leaders might also consider chartering a new coastal city. Kenya could fill the roles of host and source. Given the recent political turmoil there, they might opt to partner with other governments that could act as guarantors. One good partner might be the government of Mauritius—an African country with experience managing special export zones of its own. Another might be a respected developed country like Germany, which could act alone or in conjunction with Mauritius. The guarantor country or countries would provide credible assurance to investors that the charter and the rule of law will be respected for decades to come. With this assurance, Kenyans could immediately attract private investment that provides the urban infrastructure that they lack. Countries that do not serve as guarantors could supply services as well. For example, Kenyans could draw on Singaporean expertise in ports and airports or British expertise in common law.

These are just two of many possibilities. The UN estimates that 3 billion people will move to cities in the next few decades. The question is not whether, it’s where and under what conditions. As it stands, many of the people moving to cities will end up in slums. There is a better option. The world has room for dozens, perhaps hundreds, of newly chartered cities. Whether they involve countries acting alone or in partnerships, charter cities can create opportunities for millions of people to access better rules and lead safer, healthier, and more prosperous lives.