Here’s a common objection to the logic behind the proposal for building charter cities in poor host countries: If investment in urban infrastructure can really generate win-win benefits for investors and residents of poor countries, why isn’t it happening already? To see why, start by picturing a familiar long-term investment. Imagine that a lender (an insurance company perhaps) wanted to do a long-term deal with a borrower (someone who takes out a 30 year mortgage to build and live in a home.

For each of us, other people truly are (to borrow a phrase from Julian Simon) the ultimate resource. Rules matter because they determine whether we reach our collective potential. Bad rules divide us and diminish us. Good rules free us to collaborate and grow. Many important rules are embedded in values, norms, customs, beliefs, conventions, and shared understandings. This makes some observers pessimistic about changing a system of bad rules. “Culture,” they say, “is what really matters, and culture can’t change.

The distinction between objects and ideas is arguably the most important in economics. In a world with more people, each person has fewer objects but access to more ideas. So far, the benefit we derive from access to more ideas has far outweighed the disadvantage of fewer objects. People today have less arable land per capita, but still consume more food per capita because of all the ideas we have discovered and shared.

As you’d expect from the name, a charter city is a city governed by a charter. Sounds simple, but it’s a surprisingly powerful way to let people choose to move someplace that is well governed. A fanciful example helps illustrate how a charter city might develop. An existing treaty between the United States and Cuba currently gives the United States administrative control over a piece of sovereign Cuban territory straddling Guantanamo Bay that is twice the size of Manhattan.

Several people have asked me for a link to the site with the high resolution NASA photo of the world at night. I’ve used this picture in several presentations to illustrate geographic variation in the level of economic activity. It is revealing to zoom in on specific regions and countries. This post originally appeared on the NYU Stern Urbanization Project’s blog. To read the original post, click here.