Paul Romer doesn’t think a charter city in Haiti can work (now)

by on January 18, 2010 at 8:10 am in Economics, Political Science | Permalink

The post is here, excerpt:

Contrary to what some have suggested, a charter city in Haiti is simply not an option at this time. A charter city can only be created through voluntary agreement. Under the current conditions, the government and people of Haiti do not have the freedom of choice required for any agreement reached now to be voluntary.

He has another idea:

There are clear limits on the number of Haitian immigrants that nearby jurisdictions are currently prepared to accept. But if nations in the region created just two charter cities, they could accept the entire population of Haiti as residents. There are many locations close to Haiti where these new cities could be built, but for now, Haiti itself is the one place we should not consider.

Here is an offer for repatriation to Senegal:

Presidential spokesman Mamadou Bemba Ndiaye told reporters that Mr Wade had shared his plans with senior aides, and they involved offering voluntary repatriation and plots of land to any Haitian who wanted “to return to their origin”.

“Senegal is ready to offer them parcels of land – even an entire region. It all depends on how many Haitians come. If it’s just a few individuals, then we will likely offer them housing or small pieces of land. If they come en masse we are ready to give them a region,” he said.

1 Philip Walker January 18, 2010 at 9:34 am

Make Senegal the new Liberia? On second thoughts, that’s not such an optimistic comparison…

2 anonymous January 18, 2010 at 2:27 pm

The Senegal proposal is screwed-up on so many levels.

First of all, what does “repatriation” mean if your ancestors haven’t lived in a place for a dozen generations — or, in all likelihood, never lived there at all (would you “repatriate” the Amish to Albania?).

Secondly, is this hypothetical “entire region” currently entirely empty? It’s hard to believe that it would be a particularly inviting place, otherwise it would be fully populated already. Would newcomers be confined to this “reservation” and prevented from integrating and moving to the city and competing for jobs?

And in a continent already beset by interethnic strife within externally imposed nation-state boundaries, how much sense does it make to add one more “tribe” to the mix?

3 mulp January 18, 2010 at 6:47 pm

Let’s see, one big problem in Haiti today is water, not the lack of a supply of potable water, but the broken water pipes that distribute the water.

So, a charter city without water and sewage seems totally unrealistic.

Taking Haitians who don’t know pipe fitting and welding to a new city without water and expecting them to make the city a going concern seems unlikely unless they are taught those trades and give the equipment and supplies to do the job.

But training Haitians in Haiti to do those jobs would be of great benefit to Haiti today, and be much more valuable than having others come into Haiti to do the work. Either way, the equipment and supplies need to be shipped to Haiti.

If a major US city were hit by the same kind of earth quake, that city would lack water and sanitation for months, if not years. I’ve been noting the major water system breaks in the Baltimore-Washington area for a month or so, and each one has created a lot of disruption. If Baltimore were hit by such an earth quake, I’d guess the number of such water main breaks would be in the hundreds, and the entire city would be without water.

Would Baltimore not be in crisis if it had no water even if few of the buildings failed?

And I’ve been in ice storms in the past few years which caused a lot of problems for significant parts of several states, but for those storms, utility crews came in from all over the US, driving in on the many roads that provide easy access to the region. Still, just a bunch of ice disrupted the lives of hundreds of thousands of lives.

Would anyone argue the solution to the problem of a earthquake crisis in Baltimore was to move Baltimorians to a new charter city? This has nothing to do with law and order, but the laws of physics.

4 Jack of all Trades January 19, 2010 at 3:23 pm

Re: mulp

“training Haitians in Haiti to do those jobs would be…much more valuable”

You’re absolutely correct. The problem, though, is that there isn’t an incentive structure in place to create the demand for products/services that would lead to Haitians being trained/employed – the market forces aren’t strong enough.

The whole idea of the charter city is that it becomes an incubator for those types of incentive structures, which could eventually be transferred back to the host country, gradually, through socio-economic osmosis (e.g. China and its SARs)

5 Jack of all Trades January 19, 2010 at 5:50 pm


I think you’re confused about the role of the charter city – if you watch Paul Romer’s TED Talk at I think it would explain it better than I can, but:

“So, capitalism isn’t an incentive?”

Capitalism (a.k.a. self-interest) can be a wonderfully motivational incentive, as Tyler, Alex and most readers here I think would agree!

The problem here is places where that incentive structure breaks down, or never existed in the first place.

In Haiti, for example, despite evidence of demand for home electricity, many residences aren’t attached to the grid. Why? I don’t know, but I do know that the cost per user would be lower than the status quo (pre-quake, anyways), which was that most people had kerosene generators in their home.

The whole point is to identify places where the status quo isn’t acceptable, then establish an alternative that people can opt into (and out of) that has a different set of rules, ones that would have features like functioning capitalism that creates incentives for people to acquire skills and be industrious.

And as far as: “only those very familiar with Haiti can determine what [is best] for Haiti”, I reject your argument. Take your example of construction methods – the Haitian construction workers knew they were building on a fault line, yet they cut corners on steel rebar and upped the sand quotient in concrete to save cost – to their ultimate detriment. Bringing city planners from Los Angeles to help rewrite the construction codes would be a net positive.

However, you’re right that none of this can be done unilaterally – without choice, as Prof. Romer points out, the whole thing falls apart.

6 VHS January 28, 2010 at 1:19 am

I think Paul is shortselling his own fantastic idea. It is understandable because the problem that Haiti faces is difficult and in the present event of an earthquake very moral. However, now it actually the best time to begin to think of a charter city for that country when the interactions among the ideas and objects from foreign and domestic sources are strongest. While the quake meant heavy and sad loss of life and property, it also destroyed dysfunctional institutions that have constrtained progress in that country for decades. It would be a terrible mistake to reconstitute those very same institutions once again! Give Haitians their first ever break.

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