The Case for Charter Cities Within the Effective Altruist Framework

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.

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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.