But not all is well. No developer in Gurgaon was large enough to plan for citywide services for sewage, water or electricity. For a price, private companies provide these, but in inefficient ways. Sewage doesn’t flow to a central treatment plant but is often collected in trucks and then dumped on public land. Tap water is often delivered by private trucks or from illegally pumped groundwater. Reliable electricity is available 24 hours a day, but often using highly polluting diesel generators.

Compared with the rest of India, Gurgaon fares well but its functioning is far from ideal. Is there a middle ground between China’s ghost cities and the anarchy of Gurgaon? Surprisingly, privately planned cities may be an answer. And one of the oldest is in India.

Jamshedpur was founded by Tata Steel, as a company town, in 1908. It has landscaped parks, paved roads and even a lake, but it’s no playground for the rich. It’s a working town. Nevertheless, it is the only city in the state of Jharkhand with a sewage treatment plant, and it’s one of the few cities in all of India where residents enjoy reasonably priced, reliable electricity and safe tap water. In a survey by the marketing research company Nielsen, residents ranked the city among the best in India for its cheap and reliable provision of sewage, water, electricity, public sanitation and roads.

Jamshedpur works because Tata owned enough land so that it had the right incentives to plan and invest in citywide infrastructure. Tata has also had to maintain good services in order to attract workers. In Gurgaon, private developers built lots of infrastructure, but only up to the property line. By extending the property line to city-scale, the incentives to build large-scale infrastructure like sewage, water and electricity plants are also extended.

Private cities are also thriving in the United States. Companies created proprietary communities in Reston, Va., and Irvine, Calif., in the 1960s, which were recently ranked by CNN Money magazine as the 10th and 14th best places to live in America, respectively, because of their efficient city services and pleasing integration of business, commercial and residential uses.

Throughout the United States, new housing is governed privately. Millions of Americans live in homeowner associations that often provide security, garbage collection and transportation. Some large cities supplement public police with private security. San Francisco, for example, has had a private police force protecting some downtown areas for almost 170 years.

Given the required scale, proprietary cities have every incentive to plan and invest in appropriate infrastructure. Even better, top-down planning can ensure competition among cities by auctioning enough land to build five to seven proprietary cities in a region. Competition will keep rents low and create incentives for innovation and experimentation.

The bones of a city are hard to reset, so the decisions we make today will affect how people live in the future. Competitive proprietary cities could help to coordinate the delicate dance of top-down and bottom-up planning that cities need to thrive.