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Detroit: Charter City?

December 2, 2011

Shikha Dalmia has an excellent new op-ed discussing the possibilities of bringing Charter Cities to American soil.

Bloomberg recently ran a piece on Detroit, which is rapidly becoming an unmitigated disaster of special-interest capture and decaying public services. The severity of Detroit’s bad governance is shocking:

Its population fell 25 percent to 714,000 since 2000, according to 2010 U.S. Census data that suggest tens of thousands moved to suburbs. Nearly half of Detroit’s adults, roughly 200,000, are functionally illiterate, according to the National Institute for Literacy.

It serves as a strong case-study in the power of ‘exit’ away from bad institutions. Even with the relatively narrow choice in governance between American cities, people are still willing to leave en masse when things get bad enough.

It’s also worth noting that the Free Cities model, where compensation for authorities is tied to city growth rates or a city is held privately with citizens as shareholders, this decline would be felt early on. Watching a Citizen’s Dividend shrivel or an official’s salary fall from the deadweight losses of special-interest lobbying breeds reform early, thorough, and fast.

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