A charter city is a type of special reform zone that starts with enough land to one day host an entire city. The Charter Cities initiative encourages governments in rapidly urbanizing countries to consider using charter cities to experiment with reforms that can spur-on social progress. We're often asked why it makes sense to think at the city-scale — why not experiment with reform in a smaller zone, such as an industrial park adjacent to an existing city?
Any charter city will, of course, start small. But by thinking at the city-scale, leaders can give the reforms in a charter city room to succeed—the potential to attract, house, and employ millions of people, many of whom will be heading to cities this century anyways. Unlike a small zone, a charter city gives successful reforms a chance to scale to many people, making it more likely to influence welfare-enhancing change in the broader society. Of course, if the experimental reforms in a charter city fail to attract residents, then the vast majority of the greenfield site on which the charter city was established will remain just that, greenfield.
In this FAQ video, Paul Romer addresses the question of why rapidly urbanizing countries should think about special economic zones at the city-scale.
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