Charter cities in China By Scott Sumner

Paul Romer has long advocated the creation of “charter cities”, especially in countries with a dysfunctional government. This would involve isolating a section of a larger country and replacing control from the central government with a new administration composed of technocrats. It would feature transparency, low levels of corruption, property rights and the rule of law. Hong Kong and Shenzhen are sometimes cited as successful examples of this concept, although Shenzhen has less independence than is typically contemplated for a charter city.

In a book of essays, Simon Leys makes a case for China being place where the charter city concept was first developed, more than 2500 years ago:

[Confucius] spent virtually his entire life wandering from state to state in the hope of finding an enlightened ruler who would at last give him a chance and employ him and his team–who would entrust him with a territory, however small, where he might establish a model government. All his efforts were in vain. The problem was not that he was politically ineffectual or impractical—on the contrary. The elite of his disciples had superior competences and talents, and they formed around him a sort of shadow cabinet: there was a specialist in foreign affairs and diplomacy, there were experts in finance, administration and defence. With such a team, Confucius presented a formidable challenge to the established authorities: dukes and princes felt incapable of performing up to his standards, and their respective ministers knew that, should Confucius and his disciples ever get a foothold at court, they themselves would quickly be without employment. Wherever he went, Confucius was usually received with much respect and formal courtesy at first; in practice, however, not only did he find no political opening, but cabals eventually forced him to leave.

No wonder Romer had so much trouble finding willing partners.

I’ve ordered a copy of the Analects. I wouldn’t be surprised if Confucius is one of those people (like Smith, Burke, Machiavelli, etc.) who is somewhat more liberal than his reputation.