A charter city is a city in which the governing system is defined by the city's own charter document rather than by state, provincial, regional or national laws. In locations where city charters are allowed by law, a city can adopt or modify its organizing charter by decision of its administration by the way established in the charter. These cities may be administered predominantly by citizens or through a third-party management structure, because a charter gives a city the flexibility to choose novel types of government structure. Charter cities are similar in administrative structure to special administrative regions.

Examples[link]

For example, in California, cities which have not adopted a charter are organized by state law. Such a city is called a General Law City, which will be managed by a 5-member city council. A city organized under a charter may choose different systems, including the "strong mayor" or "city manager" forms of government.^[1][2] One example of abuse of the charter system was in Bell, California. The charter was created after a lit­tle-no­ticed spe­cial elec­tion, where few voters understood what becoming a charter city meant. After a charter was approved, state laws limiting city salary no longer applied and City Manager Robert Rizzo gave himself a salary of $1.5 million for managing a city of about 36,000 people. ^[3] As of June 2008, 112 of California's 478 cities are charter cities. A few examples include Newport Beach, Huntington Beach, and Irvine.^[4]

However, charter cities that are subordinate to the rules of larger institutions (such as provinces or nations) have limited flexibility to adopt new governance structures. Historical examples cover a broad range of charter cities, from virtually independent city-states to smaller municipalities which have limited administrative freedom. For example, the Hansa League port city of Lübeck, Germany was a chartered city, governed by an autonomous council of local burgesses.^[5] Similarly, the state of Pennsylvania was founded after Charles II granted William Penn a land charter in 1681.

Hong Kong and Macau both are current examples of special administrative regions, similar to charter cities, in China.

Governance and administrative structure[link]

The range of what is considered a "charter city" may lead to definitional ambiguities. Most times, however, a charter city is founded by charter before large-scale development takes place. While a city may adopt a new "charter" long after its first codification of rules, as in the cases of many cities in California, generally the designation of a charter city is reserved for those municipalities whose charter guides development decisions or influences the creation of social structure from the beginning, as in the case of Hong Kong. A charter city may have some exemptions from some state or provincial laws, which varies entirely for each particular region.

With the help of a guiding charter, cities may be able to avoid administrative inefficiencies and establish rules with alternate social motivations. Thus, one benefit of charter cities is the freedom they offer in establishment of rules of governance. For example, many charter cities, like Hong Kong and Singapore as cities, use alternative forms of property taxation. Because charter cities are often founded with a goal of large-scale urban development, efficient use of the city's limited land is of utmost importance, for both the economic sustainability of the citizens and the government units. Thus, rather than using the traditional tax on both property and land, charter cities may use land value taxation, which taxes only the value of land, thus not providing disincentives for development.

Development potential[link]

Economist Paul Romer proposes founding many new charter cities in developing countries. Romer suggests that a developing country pass a law that sets aside a tract of land for a new charter city. This charter city would be administered by a developed third-party guarantor government, and citizens from the host country (and maybe other countries) could move in and out as they please. The point of the charter cities idea is to give citizens the choice about where they want to live and to provide the basic rules and amenities required for economic growth. Ideally, by establishing a city with highly-developed rules and governance in an underdeveloped region, living and working in a charter city may provide a closer and more attractive alternative to moving far away to more developed countries. ^[6]

In Romer’s conception, there are three main actors in the creation of a charter city. First, there is the developing host country. The host country provides the land, and designates that land as a special reform zone, subject to the foundational set of rules. Second, the developed guarantor country administers the region, perhaps with a board of governors and an appointed chairman like the Federal Reserve System in the United States. Third, the source country will be where the charter city’s residents come from. This may be predominantly from the host country, but there also may be a number of source countries. ^[6]

In practice, some countries have been receptive to Romer's idea. Upon meeting with the president, Madagascar considered creating two charter cities, but the plan was scrapped when the political leadership that supported the idea was removed from power.^[7] Most recently, the government of Honduras has considered creating a charter city. ^[8]

See also[link]

• Chartered cities of Ethiopia
• Southern African special administrative region
• Dillon's Rule
• Home rule
• Free imperial city
• Special Administrative Regions
• Urban Enterprise Zone
• City-state
• Micronation

References[link]

Further reading[link]

• Lang, Diane (December, 1991) (PDF). Dillon's Rule...and the Birth of Home Rule. New Mexico Municipal League. http://nmml.org/files/2008/01/dillon.pdf. Retrieved 2008-12-26.  Discussion of Dillon's rule, charter cities and home rule in New Mexico.

External links[link]

• California State Constitution, Article 11: Local government
• Charter Cities global Information
• The Atlantic: The Politically Incorrect Way to End Poverty
• Podcast with Paul Romer about Charter Cities
• Technology Entertainment Design video with Paul Romer about Charter Cities
• "A Quick Case for Charter Cities: Memo to the Gates Foundation" by Bryan Caplan

Paul Romer
Paul Romer
Born	1955 Denver, Colorado, USA
Nationality	USA
Fields	Economics
Institutions	New York University, Stanford University
Alma mater	University of Chicago

Paul Romer (born 1955) is an American economist, entrepreneur, and activist. He is currently professor of economics at the Stern School of Business at New York University.^[1] Prior to that, Romer was a senior fellow at Stanford University's Center for International Development, the Stanford Institute for Economic Policy Research, and the Hoover Institution,^[2] and a fellow at the Center for Global Development. He is a pioneer of endogenous growth theory.

Romer earned a B.S. in physics in 1977 and a Ph.D. in economics in 1983, both from the University of Chicago. He taught at the University of California at Berkeley, the University of Chicago, and the University of Rochester. He was named one of America's 25 most influential people by Time Magazine in 1997,^[3] and in 2000 started the online educational company Aplia, which was purchased in 2007 by Cengage Learning. Romer was awarded the Horst Claus Recktenwald Prize in Economics in 2002. He is the son of former Colorado governor Roy Romer.^[4]

Academic contributions[link]

Paul Romer's most important work is in the field of economic growth. Economists studied long-run growth extensively during the 1950s and 1960s. The work of Robert Solow, for example, established the primacy of technological progress in accounting for sustained increases in output per worker. Romer's articles published in 1986 and 1990 amounted to constructing mathematical representations of economies in which technological change is the result of the intentional actions of people, such as research and development.

Romer is credited with the quote, "A crisis is a terrible thing to waste." which he said during a November 2004 venture-capitalist meeting in California. Although he was referring to the rapidly rising education levels in other countries versus the United States, the quote became a sounding horn by economists and consultants looking for a positive take away from the economic downturn of 2007-2009.^[5]

His latest contribution has been in trying to replicate the success of charter cities and make it an engine of economic growth.^[6] Romer has argued that with better rules and institutions, undeveloped nations can be set on a different and better trajectory for growth.^[7]

Dominant theme[link]

“Economic growth occurs whenever people take resources and rearrange them in ways that are more valuable. A useful metaphor for production in an economy comes from the kitchen. To create valuable final products, we mix inexpensive ingredients together according to a recipe. The cooking one can do is limited by the supply of ingredients, and most cooking in the economy produces undesirable side effects. If economic growth could be achieved only by doing more and more of the same kind of cooking, we would eventually run out of raw materials and suffer from unacceptable levels of pollution and nuisance. History teaches us, however, that economic growth springs from better recipes, not just from more cooking. New recipes generally produce fewer unpleasant side effects and generate more economic value per unit of raw material.

Every generation has perceived the limits to growth that finite resources and undesirable side effects would pose if no new recipes or ideas were discovered. And every generation has underestimated the potential for finding new recipes and ideas. We consistently fail to grasp how many ideas remain to be discovered. Possibilities do not add up. They multiply.”^[8]

Publications[link]

• "Growth Cycles", with George Evans and Seppo Honkapohja (American Economic Review, June 1998). Jstor link
• "Preferences, Promises, and the Politics of Entitlement" (Individual and Social Responsibility: Child Care, Education, Medical Care, and Long-Term Care in America, Victor R. Fuchs (ed.), Chicago: University of Chicago Press, 1995).
• "New Goods, Old Theory, and the Welfare Costs of Trade Restrictions," Journal of Development Economics, No. 43 (1994), pp. 5–38.
• "Looting: The Economic Underworld of Bankruptcy for Profit" with George Akerlof (Brookings Papers on Economic Activity 2, William C. Brainard and George L. Perry (eds.), 1993, pp. 1–74). Jstor link
• "Economic Integration and Endogenous Growth," with Luis Rivera-Batiz (Quarterly Journal of Economics CVI, May 1991, pp. 531–55). Jstor link
• "Endogenous Technological Change" (Journal of Political Economy, October 1990). Jstor link
• "Increasing Returns and Long Run Growth" (Journal of Political Economy, October 1986). Jstor link
• "Cake Eating, Chattering and Jumps: Existence Results for Variational Problems" (Econometrica 54, July 1986, pp. 897–908). Jstor link

Influences[link]

Romer has influenced the "People's Capitalism" concept put forth by James S. Albus--arguably a form of basic income guarantee.[1]

See also[link]

• Endogenous growth theory

References[link]

External links[link]

• The Politically Incorrect Guide to Ending Poverty In The Atlantic
• Paul Romer's talk on Ted.com regarding charter cities
• Paul Romer's home page at New York University
• Interview with Reason Magazine
• Aplia.com

Bryan Caplan

Public Choice school
Born	(1971-04-08) April 8, 1971 (age 41) Northridge, California
Nationality	United States
Influences	Donald Wittman, Ayn Rand, David D. Friedman, Murray Rothbard, Tyler Cowen, Gordon Tullock
Contributions	Rational Irrationality

Bryan Caplan (born April 8, 1971) is an American economist, a Professor of Economics at George Mason University, Research Fellow at the Mercatus Center, adjunct scholar of the Cato Institute, and blogger for Econlog. He is best known for his work in public choice theory and for his Right-libertarian ideology.

Personal life[link]

Caplan grew up in Northridge, California. He currently lives in Oakton, Virginia with his wife and three sons. He describes himself as being type ENTJ on the MBTI and as an "openly nerdy man." He is the author of one graphic novel and several role-playing game campaigns. He has described role-playing games as "an art form, on par with novels, or movies, or comics"^[1] and has been published in Dragon magazine.^[2]

According to Caplan, he was first introduced to Right-libertarian political philosophy through the writings of Ayn Rand and that it was his interest in philosophy that drew him to study economics.^[3]

Academic career[link]

Caplan earned a B.A. in economics from the University of California at Berkeley in 1993 and a Ph.D. in economics from Princeton University in 1997. Since then, he has spent his entire career at George Mason University.

Austrian economics[link]

Caplan considered himself an Austrian economist before graduate school, and much of his work draws upon themes in Austrian economics. Nevertheless, most of his academic work on Austrian economics is critical. He has written that "while self-labeled Austrian economists have some valid contributions to make to economics, these are simply not distinctive enough to sustain a school of thought. The task of developing an alternate Austrian paradigm has largely failed, producing an abundance of meta-economics (philosophy, methodology, and history of thought), but few substantive results."^[4]

Public choice[link]

The bulk of Caplan's academic work is in public economics, especially public choice theory. He has agreed with political economist Donald Wittman that traditional public choice has reached conclusions inconsistent with the canonical assumption of voter rationality; many of his publications examine the effects of relaxing this assumption, an idea Caplan dubbed rational irrationality.^[5] In a series of exchanges with Wittman, Caplan defended many of the conclusions of public choice while agreeing that Wittman's criticisms hold under the assumption of voter rationality.^[6][7][8][9] Caplan has also done empirical work on public opinion which suggests voters indeed hold systematically biased views about economics.^[10] His book, The Myth of the Rational Voter, provides a detailed account of Caplan's theory of rational irrationality as well as his summary of some empirical evidence of voters' systemically biased beliefs about economics.

Author[link]

Myth of the Rational Voter[link]

The Myth of the Rational Voter: Why Democracies Choose Bad Policies, published in 2007, further develops the "rational irrationality" concept from Caplan's earlier academic writing. It draws heavily from the Survey of Americans and Economists on the Economy in making the argument that voters have systematically biased beliefs about many important economic topics. Caplan argues that voters indulge these biases at the polls, creating a negative externality because they do not directly bear the full cost of their action.

Selfish Reasons to Have More Kids[link]

Caplan's second book, published in 2011, argues that the cost of having children is lower than most people believe and many potential parents could increase their welfare by having more. It is his first book written for a general audience, although it draws heavily from the academic literature in behavioral genetics, particularly twin and adoption studies which are relevant to the nature versus nurture debate.

Future projects[link]

Caplan's next planned book has the working title The Case Against Education: A Professional Student Explains Why Our Education System is a Big Waste of Time and Money; he has previously argued that almost all of education is inefficient signaling. Caplan has outlined book projects to follow will deal with the root causes of poverty (Poverty: Who to Blame) and presenting a philosophical / economic case for pacifism (Pragmatic Pacifism: The Realism of Idealism).^[11] While he still publishes occasionally in professional journals, he has shifted his focus almost entirely to books.

Political views[link]

Caplan is an anarcho-capitalist, citing influences such as Murray Rothbard and David D. Friedman, and has written on the feasibility and desirability of a stateless society.^[12] He promotes austerity for marginal reform^[13] and is a vocal proponent of open borders.^[14] Despite his pacifist position and radical libertarian ideology, he has criticized left-libertarianism.^[15][16] He has also criticized some economists' (such as his colleague Robin Hanson) use of an efficiency-only moral standard,^[17] advocating instead ethical intuitionism with efficiency considerations secondary to moral principles.

Controversies[link]

Caplan wrote an essay entitled "Columbus: The Far Left is Dead Right" to explain why his agreement with the far-left on Christopher Columbus was unusual. Caplan decried some of Columbus's defenders for engaging in cultural relativism to defend his policies of mass enslavement.^[18]

In April 2010, he caused controversy with a blog post that argued that women were more free in the 1880s than they are in the 21st century.^[19] This post led Bradford DeLong to call Caplan "the stupidest man alive".^[20]

Selected works[link]

Books

• The Myth of the Rational Voter: Why Democracies Choose Bad Policies. 2007. Princeton, NJ: Princeton University Press. (Named a Best Book of 2007 by the Financial Times)
• The Myth of the Rational Voter: Why Democracies Choose Bad Policies. 2008. Princeton, NJ: Princeton University Press. [Paperback edition with a new introduction by the author.]
• Selfish Reasons to Have More Kids: Why Being a Great Parent is Less Work and More Fun Than You Think. New York, NY: Basic Books. 2011.

Journal articles

• "Rational Irrationality: A Framework for the Neoclassical-Behavioral Debate." Spring 2000. Eastern Economic Journal 26(2), pp. 191–211.
• " Rational Ignorance versus Rational Irrationality." 2001. Kyklos 54(1), pp. 3–26. (lead article)
• "Rational Irrationality and the Microfoundations of Political Failure." June 2001. Public Choice 107 (3/4), pp. 311–331.
• "The Logic of Collective Belief." May 2003. Rationality and Society 15(2), pp. 218–42.
• "How Do Voters Form Positive Economic Beliefs?" Evidence from the Survey of Americans and Economists on the Economy." September 2006. Public Choice 128(3/4), pp. 367–81.

References[link]

External links[link]

Wikiquote has a collection of quotations related to: Bryan Caplan

• Bryan Caplan's Website
• The EconLog blog
• "The Myth of the Rational Voter" (essay)
• Anarchist Theory FAQ
• Why conservatives should be libertarians
• Intellectual Autobiography of Bryan Caplan by Bryan Caplan
• Why I am not an Austrian economist
• Caplan on voting Caplan discusses his book on EconTalk
• Caplan on labor markets Caplan discusses labor markets on EconTalk
• Caplan on voter ignorance on NPR Caplan discusses voter ignorance on NPR
• Video of interview/discussion with Caplan by Will Wilkinson on Bloggingheads.tv