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TEDGlobal Attendees Vote Competitive Government “Exciting”

July 23, 2009

The TED Blog has Running notes from Paul Romer’s presentation this morning on his model of competitive government, which he’s currently calling a Charter City:

When the first slide does appear he urges us look at the picture of African students doing their homework under streetlights because they have no electricity in their homes. He zeroes in on one of the students and christens him Nelson. “I’ll bet Nelson has a cell phone,” Romer remarks. He then asks the audience why Nelson would have a cutting edge technology like a cell phone but no access to electricity. His answer — rules. Romer explains that in this country the electric company has to provide electricity at a subsidized price, and so cannot make profit. They have no incentive or ability to reach more customers. The president has tried to change pricing but protests broke out from businesses and the public.

“How can we change rules? ” Romer asks.

He moves our attention to China. China, he says, demonstrates both the strengths and weaknesses of working with rules. They developed steel and gunpowder, but never developed rules for spreading those. Then, they developed rules that cut them off while other countries were zooming ahead. However, in the late 1970s, growth took off in China. Something changed. Romer shows that the brightest spot in China is Hong Kong. Hong Kong was a small bit of China that for most of the 20th century operated under a different set of rules, that were copied from working market and under the care of Great Britain. Hong Kong, he says, became a model people could copy when the rest of mainland moved to the market model. The demonstrated successes there led to a consensus on a market model move throughout the economy.

Romer asserts that we must preserve choices for people and operate on the right scale. A village is too small and a nation too big. Cities give you the right balance. The proposal is he conceives of is a charter city with investors to build infrastructure, firms to hire people and families who will raise children there. All he wants is some good rules, uninhabited land and choices for leaders, which he thinks should translate to partnerships between nations.

At the end of the talk, Chris Anderson does a quick audience poll by a show of hands. “What do you think? Mad or exciting?” Anderson asks. Overwhelmingly, the hands say exciting.

We previously covered Romer’s earlier version of this talk.  He has a bare-bones website up at, including a blog, which I suspect we may be linking to on occasion.  The introductory post:

Welcome to the Charter Cities blog. It will bring together news reports, case studies, and analytical pieces that bear on the concept of new cities with innovative systems of governance. Relevant posts can draw on economics, engineering, technology, finance, law, political science, and international relations.

The format is that of a blog, but our goal is to build a community with norms like those of Wikipedia. We hope that posts have lasting value as reference material, and we strive for objectivity. Comments are welcome, and the most useful comments on a post are those that lead to an important revision or extension that can be re-posted as an update. Comments that are directed at a person rather than an idea are discouraged. We hope to build a community of contributors over time. As an alternative to commenting on a post, you also can reach us via the web form on the contact page.

I’m glad to see the wraps coming off this project, it’s great to see someone of Romer’s caliber working in this crucial and under-served area.

(HT @Openworld)

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