Are Privatized Cities the Next Big Thing?
In contrast to the command-and-control nature of Smart Growth cities, the government of Honduras has signed a memorandum of agreement with international investors enabling them to develop exclusively “privatized cities,” complete with their own police, laws, government and tax systems.
“The ‘model cities’ will have their own judiciary, laws, governments and police forces. They also will be empowered to sign international agreements on trade and investment and set their own immigration policy.”
There are high expectations for this experiment. Not surprisingly, one of the first objectives is the provision of basic infrastructure. Todd Zywicki writes that its “most important” infrastructure in building a free and prosperous society is the rule of law – that is, “a court system and a set of voluntary laws that investors and workers can opt-in to by contract.”
For hard infrastructure – roads, utilities, emergency dispatch, etc. – the investors can look to places like Sandy Springs, Georgia, that have outsourced most of its public services to private operators. For cash-strapped cities facing rising costs and declining revenues, the models are there for them to follow. But it takes political courage to challenge comfortable conventions.