Building the Voluntary City: Lessons from Gurgaon and Jamshedpur

by on November 5, 2014 at 7:22 am in Books, Economics, History, Law | Permalink

The world’s urban population is growing very rapidly, especially in the developing world. The McKinsey Global Institute estimates that in India alone such an expansion will require the building of, in essence, a new Chicago every year for the next several decades. The problem with these numbers is not the expense. The problem is political and organizational. Many currently less-developed countries, including India, remain high in corruption and low in efficiency, especially in the administration of their towns and cities. It would be wonderful if foresighted and public-spirited government planners would provide India and other developing nations with wise urban planning but it seems unwise to rely on what has historically been rare for this massive transformation. Is there an alternative?

In Lessons from Gurgaon, India’s private city (working paper) found in a new book Cities and Private Planning  Shruti Rajagopolan and I explore this question. Gurgaon, which I have written about before, shows both the successes and failures of private development. On the surface, Gurgaon is a gleaming, modern city built nearly overnight on wasteland. Gurgaon was built, however, without benefit of planning and its failures–most notably poor and inefficient provision of  water, sewage, and electricity–are a warning. The failures all stem from high transaction costs, Gurgaon’s private developers have simply not managed to Coasean bargain and internalize externalities. It’s clear from Gurgaon that cities need advance planning–a reservation of rights of way for water, sewage and electricity at the very minimum–but does the planning have to be provided by government which is often incapable of such foresight?

The lessons of Jamshedpur, India, suggest another approach. Jamshedpur is a private township, planned from the beginning by visionary businessman Jamshetji Nusserwanji Tata, who, after travelling to the United States to see Pittsburgh, returned to India to found Tata Iron and Steel. Jamshedpur has been run by a single, integrated entity for over 100 years and as it is integrated it has internalized externalities. As a result, Jamshedpur, India’s other private city, has some of the best urban infrastructure in all of India.

Gurgaon shows the benefits of competition. Jamshedpur the benefits of integration. Can we get the best of both worlds?

If the rights to develop Gurgaon had originally been sold in very large packages, some five to seven proprietary but competitive cities could have been created in that region. Within this system the role of the state is to make it possible to auction large parcels of land. Once such parcels and associated rights to develop the land are created, private developers will provision public goods and services up to the edge of their property.

As proprietary communities, the competitive cities would have every incentive to invest in and especially to plan for appropriate infrastructure. Moreover, with five to seven communities in the same region, competitive pressures would keep rents low and at efficient levels for maximizing net benefits (Buchanan and Goetz 1972, Sonstelie and Portney 1978). Within the larger city, subdivisions on the order of neighbourhoods and business districts could be sublet and run by competitive firms with the overarching city establishing rules to internalize externalities. Competitive private governments would also generate experimentation and innovation in new rules that would then spread through intercity learning (Romer 2010).

Thus, Rajagopolan and I conclude:

In the next five decades many entirely new cities with populations in the millions will be built in places where today there is little or no population or infrastructure. Most of the urban development will occur in the developing world where government resources are stretched thin and planning is in short supply. Gurgaon illustrates the scope and the limits of private sector provisioning when the state machinery fails to provide essential public goods. The lesson of Gurgaon, Walt Disney World, and Jamshedpur is that a system of proprietary, competitive cities can combine the initiative and drive of private development with the planning and foresight characteristic of the best urban planning. A proprietary city will build infrastructure to attract residents and revenues. A handful of proprietary cities built within a single region will create a competitive system of proprietary cities that build, compete, innovate, and experiment.

1 Ray Lopez November 5, 2014 at 7:46 am

Bo-ring. Try getting Dr. Romer as a co-author next time. He could tell you guys a thing or three about free cities.

2 Becky Hargrove November 5, 2014 at 8:02 am

Are you kidding? If people don’t need to start over in times of gridlock…when do they?

3 Ray Lopez November 5, 2014 at 8:10 am

@Becky, surely you jest?

4 Axa November 5, 2014 at 8:06 am

There’s another public good that is generally forgotten in the developing world: the minimization of natural hazards like floods. The government may prohibit development in too risky areas (floodplains) or in areas that contribute to stormwater management( rivers & lakes). After development, solutions become a lot more expensive: dams, channels, levees, pumping, etc.

Any data on how the storm water management works?

5 Just Another MR Commentor November 5, 2014 at 8:43 am

Forget about building cities in India – Move them all here to take advantage of our institutions. I hope the new Congress has a good pro-business, free market, libertarian bent so we can finally get moving on picking up those trillion dollar bills.

6 Illinoisan November 5, 2014 at 9:08 am

If the article was meant to highlight local corruption as an obstacle to effective urbanization in developing countries, perhaps the challenge should have been framed using a different reference point than building a new Chicago every year.

7 chuck martel November 5, 2014 at 10:05 am

Local corruption is always more prevalent than corruption on higher levels because the humans that inhabit smaller political subdivisions are a less developed species than those on the national stage. The national figures are more thoroughly vetted by the media because they’re more important. Joe Biden, for instance, has risen from Nowheresville to next in line for the most powerful position on the Green Planet because he’s incorruptible and we know it. A sleaze like Mayor Oscar Hernandez, of Bell, CA, on the other hand, is only eventually revealed because the media is preoccupied with Mrs. Barak Obama’s dietary opinions.

8 carlospln November 5, 2014 at 1:31 pm

Joe Biden? THE Joe Biden?

The Senator from MBNA?

9 Careless November 5, 2014 at 9:37 am

OT: I’ve been reading this blog for 8 years or so, and I still can’t stop transposing the B and Rs in Alex’s name. So I’m petitioning to have his name changed to Tarrabok to make things easier for me

10 NeedleFactory November 5, 2014 at 8:44 pm

Don’t confuse me.

11 charlie November 5, 2014 at 10:33 am

This is a great idea. We should invite the British or dutch in to run some of these enclaves. They seem to have nice cities. What could possibly go wrong?

Hell, I’d even include the French but for some reason I think the Portuguese are not going to do much. Even if they invented the planned city.

12 A Muse November 5, 2014 at 10:43 am

Tangentially, how might the securitization of income taxes in a jurisdiction change the level and quality of public goods provided? Certainly, the holder would have incentive to provide at least basic services — the water, sewage, and electricity referenced above (and in the near term, attracting industry might seem attractive).

But in the longer term, or in more mature economies (read: internet), the real value would lie in the capture of yet-unrealized human capital gains. Would it not make sense, then, to facilitate (note: NOT supply, i.e. public hospitals) better quality education, healthcare, or even present and future air quality, to either develop your talent (thus hopefully income) from within, or attract it from outside?

Now, holding income constant in a given area, the security is most valuable to the governor who can supply necessary services at the lowest cost (which is how government works now, correct?). The challenge may be to avoid a possible equilibrium where less prudent holders/governors undersupply their citizens (which would only happen if they lacked mobility, due to policy or financial constraints, but the latter seems unlikely).

13 Mark November 5, 2014 at 11:27 am

“The problem with these numbers is not the expense.”

The problem that Alex is interested in is not the expense. The construction of new cities is very expensive. The number of visionary billionaire developers who will take it on is finite. Well-planned Chicagos dominated by a single landowner will not arise at one per year.

14 skh.pcola November 5, 2014 at 11:37 pm

“The problem with these numbers is not the expense.”

I copied that quote to comment on it, as you did. Because the expense is the basis for the “notably poor and inefficient provision of water, sewage, and electricity.” None of that is free and none of that magically appears.

15 V.Iyer November 7, 2014 at 12:32 am

Comparing Gurgoan to Jamshedpur is a bit misleading. People would have bought in Gurgoan even if it had been a lot more horrible than it turned out simply because it is in the NCR.
Who in their right mind would have gone to Jamshedpur if the Tatas hadn’t developed it as a Company town with all the amenities from the get go?
Lavasa might be a better case study highlighting the pit-falls in building new cities.

16 Prakash November 7, 2014 at 5:47 am

I agree. Any such analysis of private Indian cities should have included amby valley, lavasa and perhaps even puttaparthi.

17 box office earning November 7, 2014 at 12:08 pm

Woah! I’m really digging the template/theme of this website.
It’s simple, yet effective. A lot of times it’s tough to get that “perfect balance” between user friendliness and visual appeal.

I must say you’ve done a fantastic job with this.

In addition, the blog loads super quick for me on Opera. Excellent Blog!

18 Medicare in Texas November 7, 2014 at 12:50 pm

Nice post. I learn something new and challenging on blogs I stumbleupon every
day. It will always be exciting to read articles from other
authors and practice something from other websites.

19 wallpaper iphone 4 hd 2011 November 7, 2014 at 2:23 pm

Hello, the whole thing is going well here and ofcourse every one is sharing data, that’s in fact fine, keep up
writing.

20 tx Medicare November 7, 2014 at 3:51 pm

This is a topic that is close to my heart…
Take care! Exactly where can I find the contact details for questions?

21 luxury places November 7, 2014 at 10:13 pm

The Tunics, Dresses and Wedding Dresses line are all desiged
for the eco-minded woman who is looking for long lasting quality in a fashionable green piece.
Thankfully, the hotel gave discounts and free breakfast and that did appease my guests but for me,
it made my perfect wedding day end on a very sour note.
Plan your trip with some research: A real luxury traveler would plan their trip carefully, keeping in mind important things like the weather at
the destination, the season, the safety, the ease of navigation and
the health concerns, if any, at their destination.

22 hotel naruko November 7, 2014 at 10:20 pm

Hi, yup this piece of writing is truly pleasant and I have learned lot of things from it about blogging.

thanks.

23 www.brunomars.com November 8, 2014 at 12:15 am

I every time spent my half an hour tto read this website’s
content everyday along with a mug of coffee.

24 machiaj halloween 2014 acasa November 8, 2014 at 6:21 am

This makeup are awesome, In case you have occasion you can chekup this make-up too

25 control canon color wireless November 8, 2014 at 4:43 pm

I’m very pleased to discover this website. I need to
to thank you for ones time for this fantastic read!!
I definitely appreciated every bit of it and i also have you book-marked to check out new information on your blog.

26 panasonic dmw bck7 November 9, 2014 at 2:21 am

Thanks designed for sharing such a nice thought, piece of writing is pleasant, thats why i have read it
completely

27 sometime November 14, 2014 at 1:57 pm

I am now not positive the place you are getting your info, but good topic.

I must spend a while finding out much more or figuring out more.
Thanks for fantastic info I was in search of this info for my mission.

28 ran November 16, 2014 at 8:00 am

In most supermarket, your young ones can take an effort playing on kids toys inside the
children’s toys area. Jane Brody, popular columnist to the New York Times, writes, “Toys would be better seen as tools of play. Nerf hunger games I guarantee most parents knows this important principle, however, they always ignore this principle because it is so familiar when buying toys for children.

whereever that suits you, you are able to also utilize this magnetic toy to hold even heaviest items securely for the fridge. The replication in the toy from the real army men is pretty precise and detailed.

29 baofeng teardown November 16, 2014 at 8:19 am

These are developed particularly for fuel delivery truck applications requiring intrinsically safe, explosion proof handhelds.
If these radio stations were not playing those rehashed modern metal trash, they would
be airing considered one of those bling-bling junk
that pass as Hip-hop songs. Baofeng new radio The modern technology is reshaping the configuration and scope of procedures with this world,
in no time we would see ourselves having progressed into a
fresh world order.

In relation to adding a a sense life to New Vegas, Companion Sandbox
Mode is one from the best mods for Fallout New Vegas. Baofeng bf-8+ If you devote Pat Benatar, for
instance, you will most probably receive more songs which has a strong female vocal
lead. User-centric means understanding of needs and priorities
of consumer; the clients’ customers, their channel partners, users,
and brand communities.

30 http://www.aidsmap.com November 16, 2014 at 8:34 am

You may have multiple triggers build for different events like timers, external inputs and PIR sensors, dependent about the
cameras capabilities. Connect for your network and, when prompted,
enter the passphrase you set up while your were configuring your router’s
security. Having surveillance cameras inside workplace or business may
be a disadvantage.

Hidden cameras offer portion of mind as they’re able to catch
cases about abuse, infidelity, perhaps theft. Belkin routers because of their great signal strength and security features are an excellent option for
wireless connections.

31 imageblogs.net November 16, 2014 at 8:44 am

堀北真希 CM 遠山泰之氏は、AKB48の為に土地家屋を売り払い 2010年に私設応援団を結成しました。
もしかしたら乃木坂1の運動音痴の歴史も変わるんじゃないか!って
もしかしたらあれも振り付け師みたいな人にやらされてるんですかね?

32 ママバック November 16, 2014 at 8:52 am

今回の組閣()を理解できないってのと、自分たちの努力、認められてない現状ってのは別の話。
そういえば主演女優って、わりと背が高くて細面なのが多いな
理解できませんとか、私たちの努力は無駄だったのかな?とか言ってなかった?

33 best gaming mouse brand 2013 November 18, 2014 at 12:57 am

In Mouse Hunt, you’re a little orange mouse that’s trying to have
the cheese before the big gray cats get you. This is another mouse that lights up in futuristic blue
also it really comes down to personal taste whether you consider that a feature or possibly a distraction. Gaming mouse overclock.net They make computing much
easier since they provide a smooth surface for your mouse to maneuver
across.

As you know, we have many varieties of games, from real-time strategy games,
first person shooting, online flash games to action RPG and more.
M555 gaming mouse with excellent design work, excellent materials bring comfortable manipulation from the handle, is indeed
a rare professional game hardware equipment.

34 kupimecom.zendesk.com November 18, 2014 at 1:01 am

Another thing to include mind is the fact that pocket pussy
employed for anal should never supply for vaginal penetration. You
may use it throughout horseback or on foot, and it really is one of the most enjoyable pocket pussy to
try out with inside world of Red Dead Redemption. Fleshlight
review when

35 baofeng nagoya November 18, 2014 at 12:06 pm

For any use outside your immediate family, walkie talkies are out.
A third possibility is the cosmos is awash in interstellar communications from any variety
of civilizations. Baofeng uv-5r lot com but offers more flexibility, unlimited listening along with the option to skip numerous songs while they would like.

They have to play the most up-to-date and most happening music and do it in ways that is sensitive on the dancers’ requirements.

Baofeng ip65 dog pen like this can be soldout exiting around non-public events being the
fresh dealers internet. CDR adds in the entirely new radio station,
over 2 hours of music and custom scripted PSAs along with
other announcements that fit in perfectly using the New Vegas mood.

36 timeoutcardsupportldn.zendesk.com November 18, 2014 at 12:54 pm

When you’re done, dry your ear with a towel and squirt a little bit of rubbing alcohol inside.

If in doubt, I usually cook at 350 degrees for about 20-25 minutes.
How to squirt

37 acer chromebook review November 19, 2014 at 9:31 pm

This is very much similar to the lag found on other entry level
smartphones such as the Motorola Citrus and Samsung Galaxy Prevail.
So just visit any online portal and buy your contract handset
to get the 42 inched LCD TV or any other free gifts absolutely free.
Samsung chromebook series 5

38 can you use led lights to grow weed November 22, 2014 at 8:02 pm

There are numerous individuals that do not have the benefit of a garden or
common space in which to cultivate flowers,
fruits & vegetables or plants. By pursuing the guidelines stated
earlier, you’ll be able to grow your company while avoiding many in the common pitfalls
which in turn plague those just starting out.
Pro x led grow lights I think the point that strikes me is most is Indigos do not know
these are Indigos nor can they understand, or maybe have never labeled, their abilities.

Basil is surely an excellent choice since it’s quite forgiving with regards
to sunlight. The first LED’s to be used commercially replaced incandescent and neon indicator
lamps, while they still lacked the output important to illuminate
an area.

39 next November 27, 2014 at 12:28 am

Modern CCTV Cameras are Digital Video Recorders which are useful for monitoring and Visual
Effects. The equipment and DVR they offer is part of the monthly subscription and valuable for the customer who wishes to record
a show and view it down the road. Cctv dvr file player Cameras are
connected on the stand alone DVR with either cables or wirelessly utilizing a transmitter at
the camera and a receiver to secure the DVR.

Another advantage of the HD DVR is you can fast forward through commercials.
Below we go into more details about the two main areas of a
CCTV protection technique, the Digital Video clip Recorder (DVR) and also the
Camera’s.

40 詳細 November 27, 2014 at 12:49 am

いくら話題作りとは言え、やってる方は真面目にやってんだろうから。
え~と・・・苦役列車、クロユリ、もらとりあむ・・・あといくつ?
その結果、役を割り当てられ続け、いつの間にか女優としてのキャリアを積み、

41 protein powder deals November 27, 2014 at 1:19 am

When it comes to choosing the most effective protein powder, always make sure that you
put importance for the quality instead of the quantity.
Protein powder may be one of best however it can even harm your system.
Protein powder energy balls If possible you ought to also mix in some glucose powder or eat
a piece of fruit.

So whether you select hemp protein powder, hemp meal, hemp flour as well as
hemp cake, relax knowing, you will end up utilizing one
particular of natures most beneficial plant-based proteins.
Taking essential protein can improve a normal diet by completing the necessary nutrient.

42 Nerf Barrel break November 27, 2014 at 1:22 am

Parts are significantly less small, and small pieces like wheels tend to be difficult
to remove, so that it is less likely to get a wooden toy to
provide a choking hazard. Well, she accommodated
a notable part with the waiting room with doctor office toys.
Nerf integration There are a lot of very realistic toys to develop your children’s imaginations.

Durable Dog Toys are hard to locate, but you can find
options around. If you’re looking for any popular toy gun having a nifty futuristic look then you better own a Maverick Nerf.

43 baofeng tips November 30, 2014 at 12:05 am

Like a classic, dead car battery, a heart with low Interest Level cannot be recharged – no matter the
number of jumps allowing it. Here, various ways for saying a simple thing are widely-used that
bring a alternation in the radio programs. Baofeng inc You may
recall that the angel that gave the impression to Cornelius inside the book of Acts 10 was not able to mention the
naming of Jesus or talk to him about salvation, but we have
been.

You’re supposed to become figuring out how you’ll be able to teach more students at a better price and more effectively.
Baofeng alarm mode The handy radios are of immense use and they’re used generally in trade
and commerce world in various industries and for a number of objectives.
It is expandable for maximum brightness, small for straightforward portability,
and posseses an efficient dual energy system.

44 acer c7 chromebook review uk December 4, 2014 at 11:30 pm

If there are actually a lower back pain or any other chronic physiological issue trouble you, there needs to be also some
time used acclimating to this kind of shoes.

Of course, the most important difference is using the netbooks’ processors.

Samsung chromebook review In 2002, the Aspire desktop series replaced nokia’s popular Acer – Power S range.

As you know, the Acer computers and others of other functions and features delivered which has a system
of restoration installed within a hidden partition within your hard disk.
Originally $850, a promotional code and $200 markdown for Newegg.

45 cctv weather December 5, 2014 at 12:08 am

You are able to chat and find out your folks in realtime, create
conference calls, take pictures and films and send those to pals and family.
The lag time is additionally reduced (but nevertheless exists for matter of moments or milliseconds, depending on the CCTV system).
Cctv full frame However, the near future of IP-based CCTV camera remains bright, market for which can be
projected to grow at the CAGR close to 35%-40% with the
next couple of years.

Many good companies today will give a wide variety of options and tools.
Some premises are easier than the others, but this ‘s all taken into consideration if your
CCTV engineer is executing his site survey to permit him to
offer an accurate quotation.

Comments on this entry are closed.

Previous post:

Next post: