Charter City Plan to Fight Honduras Poverty Loses Initiator –

How hard the fight against poverty?  So tough that an entrepreneurial NYT prof setup a transparent model with a charter city, called “a Hong Kong in Honduras” by the Economist–that was quickly turned opaque, added “bad rules” and was, in essence, corrupted.  (He dropped out of the project.)  Sigh.

But now, Mr. Romer, an expert on economic growth, is out of his own project, tripped up by the sort of opaque decision making that his plan was supposed to change.

An internal contradiction in the theory is playing out: To set up a new city with clear new rules, you must first deal with governments that are trapped in the old ones.

“I do feel disappointed on behalf of the people I have gotten to know,” said Mr. Romer, an economist at New York University’s Stern School of Business and the director of its Urbanization Project. “The Hondurans who hoped this would be a way to escape from business as usual.”

via Charter City Plan to Fight Honduras Poverty Loses Initiator –


4 thoughts on “Charter City Plan to Fight Honduras Poverty Loses Initiator –”

  1. Economic hardships have plagued Latin America for centuries, and it seems like the best solutions come from within. Peru, for example, has averaged a GDP growth of above 5% in the 10 years leading up to 2011 ( and were able to tap into their own resources more effectively. It’s hard to say whether or not growth will last, but the premise is the same. Each country has to take charge of their own development, be it economic, social, or democratic. Honduras did well to reach out for help, but must keep a clean house on their own in order to invite more help financially.

  2. Mr Romer ideas are great and I have to argue that they are not completely unique. Many are aware that one of the main factors that maintain a country categorized as a developing country is the fact that corruption takes most of the capital that can be invested in infrastructure and to ameliorate the life of the citizens. But there is a problem that goes beyond that and that is ideas, culture, and traditions that shape the way people behave, think, and act. Corruption can be fought but traditions are really hard to change and there would always be an incentive to go back to where it was before, to go back to where one person had the advantage over the others. It would be interesting to observe what would happen with a new government and new laws and how would these variables could affect growth. If his able to combat transparency then he would be on the track to aid other countries.

    Mr. Romer accepts that one of the problems is to deal with governments that are trapped in old days and that to me that is defiantly going to be his biggest challenge.

  3. At some level, I was disappointed to hear about the troubles facing the Honduras’ charter city. I had previously read about this program in an article titled “Honduras shrugged” in the Economist ( The idea of setting up charter cities with an independent government and laws may have come from the novel “Atlas Shrugged”, hence the play on words with the Economist’s article. As the Economist notes, in recent history, no one has succeeded in implementing an “Atlas Shrugged” like enclave, but no one has ever attempted to do so on the scale of the Honduras’s project.

    Although out of pure curiosity I would like to see this project go forward, I have serious reservations about what the end-product will look like. In part, I wonder about the motives of the people designing the system. One of the groups involved in the Honduras’ project is lead by a grandson of the famous economist Milton Friedman, Patri Friedman. Patri Friedman is described by the Economist as being an outspoken critic of democracy, believing that libertarianism (the philosophical basis of the charter system) cannot exist within a democracy. He suggests that citizens should “vote with their feet”, and leave if they aren’t satisfied with the services the government provides. This suggests to me that the world that Friedman and his colleagues want to create will cater only to the rich and the already privileged.

  4. There is a great necessity for economic and social change in Honduras. While service trips to the country do help there is a need for a more permanent solution. I would have to agree with Mr. Sanchez in the fact that Mr. Romer’s plan seems like a good idea, however, a foreign country ruling would cause many difficulties. Look at our own nation’s history. In a way we were a “city on a hill”. We separated ourselves from the world and tried to cut all ties with Britain. I could imagine that the same may take place if a foreign country were to rule this new utopian like city in Honduras. It is good to learn from the past. Obviously the situation in Honduras is smaller scale than what happen with the young American nation. Nevertheless, I find it interesting to correlate the two.

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