Charter Cities?

Stanford University economist, Paul Romer proposed an idea that he believes can bring an eventual end to the cycle of poverty in undeveloped countries (Sebastian Mallaby; “The Politically Incorrect Guide to Ending Poverty.” The Atlantic. July/August, 2010.). His proposal is to establish “charter cities” in poor countries to provide an economic model of development that is not tied to their government’s presumably dysfunctional policies. The logic is analogous to charter schools which, by not being required to follow the work rules of the teacher’s unions, can enforce accountability while operating in the same environment as public schools. Another analogy is the influence of Hong Kong which, Romer asserts, provided China with a model of an acceptable path to economic vitality. Romer’s “charter cities” are to be administered by the governments of economically advanced western states.

The precedent for this proposal is the 12th century establishment of an international city to serve as a mecca for merchants by bypassing the tariffs, the taxes and the entrenched hierarchies that were common in the principalities of the time. This city, Lübeck, now in Germany, was the foundation for the Hanseatic League, an economic dynamo that powered European commerce for nearly 500 years.

Not only has Paul Romer conceived this big idea, he has been flying around the world in an attempt to implement it. That he has had no success should come as no surprise as the proposal bears a striking resemblance to colonialism. The few governments that indicated that they were willing to implement Romer’s charter city approach faced political turmoil and worse. Romer’s failure to promote the concept of charter cities rests directly on unexamined assumptions about undeveloped states – particularly those in Africa – which blind him to the realities that derail his enterprise.

The first assumption is that poverty in the undeveloped world is caused exclusively by inherent indigenous weakness and have no basis in policies generated by the governments and corporations of the nations that he envisions as charter city administrators. In the fifty years of independence in Africa, foreign aid and World Bank loans have had the effect of impoverishing African governments through debt while recycling the majority of the funds back to western contractors who design and build infrastructure projects. Corporate investments are little more than payoffs to the Swiss bank accounts of local strongmen for the exclusive rights to natural resources. The funds do not get to the colony-states’ national treasuries, yet their governments must pay off the debt. The societies get no technology transfer and often, no functional infrastructure. The people get no educational advancement, no useful skills, no permanent employment, except in commodity farming that pay’s the governments’ debt but deny them subsistence. Meanwhile any manufactured or processed item deemed necessary for modern existence must be imported. One can only conclude that the western countries’ policies toward Africa have been an unqualified success.

The second assumption that Romer and most western observers hold is that the governments in Africa are legitimate and representative. Further – as I outlined in my blog-piece Cut Africa Loose – the assumption is that African countries are viable in the long term as nation-states when, in fact, they are colony-states. Most of the recently stable nation-states of Europe are populated by ethnically and linguistically homogeneous peoples, perhaps with relatively small indigenous minorities that have signed off on the current governance order – Bretons in France, for example. No African state has that luxury, their borders having been drawn centuries ago by foreign powers. For example, instead of the Yoruba state of Ife, the Hausa state of Kano and the Igbo state of Biafra the world must enforce the existence of a country named by the wife of a British colonial functionary, Nigeria, whose many governments have yet to prove that they rule by the consent of the governed.

Romer’s third assumption is that his personal success, his academic standing and his reputation as an innovative thinker give him a special insight to solve problems for which he has no basis of understanding and that they prepare him to negotiate with African governments to advance this latest brainstorm. The fact is that his obvious hubris defines his failure. “I revived growth theory, I made technology work in higher ed. I am two for two, and I think the impossible can be done.” As a result there is blood on his hands. Romer convinced the president of Madagascar that a charter city should be established but, in his ignorance, he failed to meet with the leaders of the opposition group to gain their public support for the project. The result was that the agreement gave political leverage to the opposition leader who organized street demonstrations and strikes. In the violence that erupted as government police fired on demonstrators, 28 people died and the president with whom he negotiated was deposed. Paul Romer cannot repeal the law of unintended consequences.

The fourth assumption is a subset of the first three; that the success of western governments and economies make them the best hope for solving the problem of poverty in Africa. After all, the west is two for two, isn’t it? Sending the fox to guard the henhouse, however, can only have predictable results.

It is appalling that Paul Romer can do so much damage without being called to account and held liable. He admits to no mistakes and feels no sense of responsibility or remorse for the lives lost as a result of his meddling. Of course, it’s not as if they were members of his family. They were only 28 Africans, a small price to pay for burnishing his reputation and embossing his name on the pages of history.

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~ by glyphics1943 on August 21, 2010.