Paul Romer sheds light on rules and development

In a great talk, economist Paul Romer proposes an interesting idea to create places of innovation and development. By the creation of charter cities, who have specifically defined rules and goals, new cities can be created where motivated people can move to that like to work and live in those cities. The idea is inspired by the rapid economic development in China where special districts were created that acted as catelyzers for growth. From experimental work we know that higher levels of cooperation can be derived if people can self select into groups, especially if groups differ in their rules. For example, public good experiments where participants could chose between a group with costly punishment and a group without costly punishment, led to an increasing number of participants chosing the group with the costly punishment option, although it was not used that frequently (Gürek et al. 2006. Science 312: 60–61). An open question remains whether we are able to create successfully such charter cities. Was the success in China based on their cultural background and the centrally led nation? Will copying the idea of charter cities to other regions in the world be great opportunities for corruption of a few elite? It is an interesting idea worth to explore more.

Leave a Reply

Your email address will not be published. Required fields are marked *