Would you want to live in a private city? No? What if Google was running it – would that change your mind?

Google building and running cities is less crazy than you think. Google has expressed interest in constructing cities, and chief executive Larry Page wants to create autonomous zones that can experiment with social rules.

Combined, these two ideas have the potential to transform the world. Institutional change can jump-start economic growth, while competent and efficient administration can ensure those gains are not lost to corruption.

In Honduras, autonomous regions known as ZEDEs have the power to opt out of civil and commercial law and import a legal system of their choosing. iStock

The idea of private cities typically invokes fears of a dystopian future where malevolent corporations ruthlessly exploit the population for profits. Government is seen as a last defence against private tyranny. However, by replacing a nameless corporation with Google, the thinking changes. Rather than fear predation, we appreciate the benefits of efficient administration.

Companies like Google think long term. They are unlikely to sacrifice their hard-earned reputations for short-term gains. Further, Google is pragmatic. It will think outside the status quo, adopting the best policies to attract residents. Finally, Google is sufficiently big; it will not be intimidated by rent-seekers trying to live off others' work.