I agree with your broader skepticism of the imbalanced relationship that Romer has framed between the host and administrative countries. However, I believe there’s reasonable potential to assume a more collaborative dynamic.

Above all, your take is burdened in bias (seemingly anti-American). The very function of this ‘grand experiment’ that you deliver with such a malicious connotation, is to advance the quality of life for (in this case) Cubans. Romer, this diabolical American you speak of!!! :-O, has contributed SIGNIFICANT work to advancing economic development and growth theory. This is yet another creative and well-intentioned prospect…though the practicality of which can be debated, it’s outrageous for you to try spin this as some sly machination of Paul Romer.

In general, you need to invest lots before the unskilled uneducated labourers can pay taxes. They will start out as farmer labourers without this investment. Might be a project for an oil sultan assuming some skill immigrants but they’d want some of your to-be-reinvested profits. As social experiments to determine some optimal policies cities might pay for themselve. I’ve speculated on an arctic island for emergency climate refugees but need to get the costs of living down. Quite frankly, distressed refugees used to farming cassava won’t form useful development policy using democracy unless some skilled workers are also a part of the equation. Apart from the funding issue I like the minset. Maybe language and trade Universities and then send them to be nurses wherever?

As Alvin Rabushka of the Hoover Institution has noted, once political rentseekers have suffocated their economies, the one remaining favor left for them to “pork barrel” is an exemption from their predations. This locally-driven approach to turning failed systems inside-out has led to creation of hundreds of new freeports and free zones (including China and India’s SEZs, as well as scores of private free zones such as ZonAmerica in Uruguay and dozens of others in the western hemisphere). These locally-originated free zones have become the fastest growing parts of the world economy.

Rather than make partnerships with foreign governments the cornerstone of their free zone strategies, sponsoring countries have developed innovations to build trust (through eGovernment pilots and rent- rather than tax-dependent public sector funding systems) in the newly-liberalized business climates. Openworld is extending “challenge offers” of microvouchers and work-study projects to further understanding of such innovations, and awaken understanding of the free zone benefits at grassroots levels in impoverished regions.

In our future support to entrepreneurial schools in poor areas, we are interested in encouraging student research (summarized in YouTube videos) on areas of interest to the Charter Cities, Free Cities, and related proposals — and especially in how high-trust implementation systems can be developed locally rather than through dependence on foreign states. We’ll welcome thoughts by your and your blog readers on priority issues that high school and university-level students might explore.

Further information on free zones and the Openworld “Seeds of Change” strategy can be found at –

http://www.openworld.com
http://www.entrepreneurialschools.com
http://www.openworldinstitute.org

We look forward to communications on possible next steps.

Mark Frazier
@openworld (Twitter)

Besides, one of the reasons Hong Kong works is it’s geographical position and historical ties with the rest of Asia. Because it was a natural port, it served as an import-export hub for China and much else of the East and South East Asian region well before it became a banking centre (which arguably was largely possible because of its historic ties with the rest of the region).

Having lived in HK for 17 years, it still surprises me how little its socio-economy is understood outside of it. It’s not as liberal and free market as commonly assumed (though taxes are very low), and its ‘success’ masks some remaining urban poverty.