Sustained economic growth is the world’s best poverty reduction tool. In this paper, research associate Jeffrey Mason argues that charter cities are a highly cost-effective way to ignite long-run growth.



A substantial theoretical and empirical economic literature argues that institutions are the primary determinant of long-run economic outcomes. The paper offers a brief introduction to the institutions literature and presents two case studies focusing on sets of major institutional reforms that pulled billions out of extreme poverty: India and China. We discuss the potential areas for reform in a charter city and the widespread success of special economic zones and other projects like charter cities.



Finally, we make an initial effort at quantifying the cost-effectiveness of charter cities. Although the model is relatively simplistic, it allows for direct comparison between GiveWell’s top charities and the Charter Cities Institute. Our modeling suggests that a single charter city could be as effective as Deworm the World, GiveWell’s top charity, within 50 years. Under a set of optimistic but not unreasonable assumptions, a charter city could be over 40 times as effective as Deworm the World.



We hope this paper invites discussion on the importance of institutions and long-run economic growth among effective altruists, with charter cities as the primary vehicle to improve institutions and promote growth in developing countries.