Reformers tend to assume that progress requires higher levels of government that embrace more people and more nations. This assumption should be challenged. Some reforms may be achieved more quickly by moving in the opposite direction, by devolving down from the national level to newly created subnational jurisdictions. Even as the EU commits to more federation, as it seems poised to do with the proposed banking union, we need to ask if devolving down to new reform zones might be an important complement to familiar national and multi-national strategies.

Excerpt: “Mr Romer’s enthusiasm is undimmed. He says it will take several tries before a project succeeds. But the sort of places that most need charter cities may also be where founding them is trickiest.” Click here to read the full article.

Here at Charter Cities, we’ve received several requests for comment on recent press reports of an agreement with investors to develop the Honduran Special Development Regions (known as REDs, following the Spanish acronym). We learned of these agreements from the media and have no knowledge of their terms, so we’re unable to offer any comment about them. Back in December 2011, the President of Honduras appointed George Akerlof, Nancy Birdsall, Boon-Hwee Ong, Harry Strachan, and me (Paul Romer) to the Transparency Commission established by the RED legislation to oversee the integrity of governance in the REDs.

“Romer’s biggest idea is the importance of “rules.” Rules are, he, believes, the core DNA of any successful city–not sidewalks, not small blocks, not the width or layout of city streets. New ideas don’t need old buildings; they need strong patent and bankruptcy laws. Good rules explain why Nogales, Ariz., is roughly three times as rich as its sister city across the Mexican border. Instead of over-thinking urban form through rigid codes and top-down planning–the approach favored by modernists and New Urbanists alike–Romer and his partners refuse to plan at all, preferring to search for a minimum set of rules from which order can emerge.

Excerpt: “Romer, in a series of papers in the 1980s, fundamentally changed the way economists think about the role of technology in economic growth. Since then, he has studied why some countries stay poor even when they have access to the same technology as wealthier ones. He eventually realized something that seems obvious to any nonacademic, that poor countries are saddled with laws and, crucially, customs that prevent new ideas from taking shape.