

The Politically Incorrect Guide to Ending Poverty - b-man
http://www.theatlantic.com/magazine/print/2010/07/the-politically-incorrect-guide-to-ending-poverty/8134/

======
maxklein
It's not just politically incorrect, it's also incorrect. Hong Kong was not
setup as a place for the british to run, the british came in and controlled
it. There's a difference - because the british were absolute law and order.
There were not two voices.

A more apt comparison would be suzhou. Areas of it were developed under
singaporean authority. The singaporeans ended there with huge losses, and I
don't think they are interested in doing such anymore.

And singapore and china are relatively close culturally - if for example china
were to setup cities in Africa, diaster would occur. You can see the same
happening with current chinese ventures there: they are run and managed solely
by chinese and employ chinese. I was watching a BBc documentary the other day
about some chinese companies in Angola, and an Angolan man complained: "Why do
they need to bring people from China here to drive trucks?" The answer is
simple - if you have people from two different countries and two different
cultures where one is driving a truck and the other is managing his work, then
productivity will sink massively.

A country administering a town in another country will be constantly beset by
these cross-cultural problems. There will be conflicting interests,
conflicting cultures and conflicting work attitudes. One side will resent the
other, and instead of new booming towns, there will be wastage and empty
buildings.

The current system is better, where a country simply sends its people to build
infrastructure and then walks away. Perhaps even build the entire physical
infrstructure and buildings of a city, but the actual management has to be
separate, I'd think.

~~~
cturner
The problems in Angola aren't cross-cultural, they're just cultural. Like a
lot of Africa, there is no concept of good governance there. Starting up a
business with locals would be a nightmare.

If you were trying to remotely build a business in Angola, how would you avoid
having it stripped bare by staff corruption? The politicians would use
bullying to push the 'wrong' people away from applying for jobs there, and
look for opportunities to make payoffs to get their people hired into the
structure. Their people have grown and been fed by corruption, and would
perpetuate the practice.

~~~
maxklein
I think your comment is just horrible. You seem to be implying that African
culture is simply more corrupt and somehow inferior, which is really not nice
of you to say.

"Starting up a business with locals would be a nightmare."

I hate to be the one to break it to you, but many companies from many
countries are successfully creating businesses in Africa. And they are getting
rich at it. But people like you undermine the entire growth process of africa
- because you just lump everything together into a single bundle, and then
condemn it to be a place nobody should ever invest in. That's just horrible.

The problems ARE cross-cultural. You know why? European & American companies
trying to set up shop in Africa do indeed face the problems you are describing
above (probably because they come in with your mindset), but south african
companies are making billions selling goods to consumers. Things like
satellite TVs, Mobile Phones, etc are making billions in profits, without it
being 'stripped bare by staff corruption'.

Why's that? It's because they understand the cultural issues and don't expect
western style personal responsibility.

Just like in china things have to be done the chinese way, in africa, things
have to be done the african way. Those who know how to do it that way are
making money in the continent with the highest growing GDP.

People like you, however, who make these blanket statements about how it can
never be improved and should never be invested in, should indeed stay out -
but best of all would be if you don't discourage others from investing.

~~~
cturner
In lots of Africa, there is an extremely poor standard of governance. I'd
expect South Africa to be much stronger than average, and Botswana too.

In preparing my earlier comment, I originally typed out and then deleted a
long section saying that we need language that allows us to distinguish
regions of India, Brazil, South Africa where it's straightforward to do
business, and to distinguish that from places where it's not. That the term
"third world" is too broad.

    
    
        People like you, however, who make these blanket
        statements about how it can never be improved 
    

I did no such thing.

~~~
maxklein
You misunderstand. South African companies are doing business in WEST AFRICA.
Celtel from a Sudanese guy is very successful everywhere. What you have
suggested in this other post is even MORE offensive. You've doubled down and
said that you want to elevate those countries into a new category and put the
African countries even lower in the list.

You have basically no idea about how business runs in Africa or what are the
countries. That's why you're pointing out the old mainstays of SA and
Botswana. That's not where the growth is in Africa.

You, my friend, are prejudiced. Yes, I'm using the word correctly, because you
have formed opinions about places and things before you actually have
information and facts about them.

We don't need language to further categorize African countries into a fourth
world or however you'd like to describe it. Rather, we should get rid of the
terminology that even categorizes countries as a lower kind of world.

~~~
cturner
Your refusal to engage in sensible, evidence-backed prejudice is leading you
to bizarre conclusions.

    
    
        You have basically no idea about how business runs
        in Africa or what are the countries. 
    

I don't, and neither do the Chinese investors. Like them, if I could make a
business work by bringing my own people in now, I'd do it. Much better than
running the gauntlet with the known governance problems and the predictable
chaos it would cause my business.

    
    
        Rather, we should get rid of the terminology that
        even categorizes countries as a lower kind of world.
    

Language should reflect the way things are, not a politically correct
perspective. Otherwise we could be encouraged towards ridiculous ideas, such
as that it's as easy to put a team together in Angola as in Japan or Germany
(or South Africa!).

~~~
maxklein
I do business in Africa, I work with chinese companies doing business in
Africa, I do business in Germany, in China also. I've spent many years in
those countries. You don't, you just have this prejudice without any
justification. It's not evidence. I have experience, you have a bunch of
articles you read on the net.

People like YOU are the greatest problem Africa faces. I'm glad the chinese
are not like you, but go where money can be made.

------
shaddi
I'm not going to fault this piece for being hand-wavy and poorly justified: it
is that, but then again, it's a piece of popular journalism which is allowed
to be. So, I'll criticize the broader idea.

This article cites China as a model. Hong Kong did not pull the rest of China
up as it grew. It certainly played a role, but frankly the communism that took
resources from the urban coast and built roads, schools, and other
infrastructure in rural areas was more likely a bigger contributor to the
massive improvement in (purely economic) standard-of-living for most Chinese.

It was in particular /not/ enlightened foreign rule of urban areas that did
this. If we accept that all geopolitical entities respond to incentives, it is
not clear that direct foreign control of areas of the developing world will
produce the ideal outcome for those areas: this will only be the case when the
incentives and interests of both the local population (which is not
monolithic, btw, but we'll ignore that for now) and the foreigners align; long
term prosperity requires that incentives align for both in the long term,
which seems terribly unlikely. Moreover, the history of development is fraught
with stories stories good-intentioned outsiders failing to make a beneficial
impact because they poorly understood the complex local situation, and it's
simply unrealistic to assume you can just start with a clean-slate-by-fiat in
a "charter city" and build without considering a place's history.

I think Romer has a good core idea, one that few people would argue with.
Namely, development is not just a matter of fixing the "Production = F(capital
& labor)" equation; good governance, good ideas, and good people all are
required. While it may be surprising to some, this is an idea that is pretty
well understood (at least at a high level) in the development
community/industry. My beef with his idea is a flawed execution, and one that
I think could be potentially damaging in the long term. These ideas need to
come from local populations and make sense for their own contexts.

As an analogy, you just aren't going to reproduce Silicon Valley by emulating
the Bay Area's regulations and investment level: there is a whole history that
made it the way it is. Attempts to do so are kind of doomed from the start, so
it's better to focus on creating new centers of prosperity that make sense for
the local context. I don't think foreigners are well positioned to do that.

\---

Another point to make, the Millennium Villages Project had a similar premise
to Romer's. The idea was that solving the problems of poverty in particular
villages through strong international partnerships would lead to spillover
effects throughout the surrounding areas. Everything I've heard about it is
that the results have been alright, but not really that great. Besides a bit
more of a heavy-handed foreign-involvement approach, I'm not sure if the
"charter cities" idea really is that different than MVP and hence it's not
clear how it will overcome the obstacles MVP faced.

Edit: William Easterly is quoted here. He has an awesome book, "The Elusive
Quest for Growth", that discusses a lot of non-intuitive reasons why
development efforts have historically failed. I would highly recommend it.

~~~
noilly
At the same time, Hong Kong served as a model for China to emulate when it
gradually liberalized its economy, beginning with the SEZs in coastal southern
China in the 1980s. I think charter cities could be a novel way of easing
people who have lived in generally corrupt and economically distorted
environments into better institutions. Westerners take for granted that the
trust embedded in the social contract and the civic and economic habits that
emerge from this trust are not a given in many places (i.e. trust that the
government/criminal entities/rent extractors will not capriciously bend things
to their advantage).

~~~
joe_the_user
It seems fairly clear to me that China succeeded by inviting foreign investors
in, offering them a good deal _and_ keeping them on a tight leash. The last is
a _big_ "and".

You can contrast China's relative success to the failure of Mexican
Maquiladoras. By allowing US companies to set-up shop in fashion that involved
no commitment, no building of infrastructure and no requirements to keep
capital in the country, Mexico opened itself up for the situation of today,
where US companies in Mexico are closing shop and moving to ... China.

Edit: China also had the luxury of being so big a market that many investors
have the "I can't afford not to be there" mentality. I'm not sure if any other
country could duplicate that now.

~~~
yummyfajitas
Failure of Maquiladoras? Could you explain this statement?

As far as I know, Mexico has more or less continually grown since NAFTA, and
Maquiladoras play an important role in their economy. They certainly are
facing competition from much less wealthy countries (like China), but so is
everyone else in the industrialized world.

[http://www.google.com/publicdata?ds=wb-
wdi&ctype=l&s...](http://www.google.com/publicdata?ds=wb-
wdi&ctype=l&strail=false&nselm=h&met_y=ny_gdp_pcap_cd&scale_y=lin&ind_y=false&rdim=country&idim=country:MEX:CHN&tstart=-315619200000&tunit=Y&tlen=49&hl=en&dl=en)

------
hristov
This article pops on hn periodically, so I do not have time to refute it in
detail yet again, but should point out quickly that this is just a plan to
create private paid for dictatorships. It is very unlikely to result in
reduction of poverty as this rarely happens in dictatorships.

What will most likely happen is some type of slave camp deal as it is already
happening in Dubai.

Now you will say, "but the people have a right to vote with their feet, i.e.
to leave if they do not like the place." Technically yes, but in reality no.
The poor foreign workers that are being held in Dubai also theoretically have
a right to leave, but they cannot because the Dubai police will simply club
them on their heads if they even mention leaving before finishing their job.

If you do not have an overall legal framework that protects individual rights,
if the people do not have the right to elect their own leaders and/or police
chiefs, then it is very unlikely the police will protect the people's rights.

~~~
izendejas
I'm not sure that the situation in Dubai is one that Romer would envision.
You're attacking a straw man.

Having said that, I won't argue either way. The devil is in the execution no
doubt. But in trying out his idea, I would hope that there's something we can
learn from it besides the would-be automatic response of "that doesn't work."
What we're currently trying is clearly not working all that well, so we'd be
insane not to try something different and I'd hope that Romer can get two
parallel "experiments"--for concisenss--in two different countries to see
which conditions, if any, are better suited for his model.

------
ddlatham
Previous discussion at:

<http://news.ycombinator.com/item?id=1426429>

<http://news.ycombinator.com/item?id=1584200>

------
thecoffman
Very interesting article - makes you think.

The Atlantic is one of the few magazines that I subscribe to in print. There's
a nice blend of culture, politics, and forward thinking, and there doesn't
seem to be a ton of editorial stance. You'll read one article from a liberal
perspective, and then another one from a conservative one. It seems to be an
all around solid publication. I don't always agree with what they publish -
but its almost always thought provoking.

------
mquander
Related: [http://unqualified-reservations.blogspot.com/2009/08/from-
cr...](http://unqualified-reservations.blogspot.com/2009/08/from-cromer-to-
romer-and-back-again.html)

I agree with the upshot of Moldbug's argument: _"Thus the practical problem
with 'charter cities' is that no one wants them: not the host regime, not the
international regime. For both, they simply work too well. Colonialism had to
die not because it didn't work, but because it worked too well."_

~~~
jdp23
Umm ... colonialism doesn't actually work well for the colonized.

~~~
mquander
Well, I'm not sufficiently satisfied with my historical knowledge to hang
around and argue this point with you, but I would point out that Moldbug
defends it vigorously. If you can't be arsed to wade through his lengthy
mumblings, you can CTRL-F _"The fundamental observation of colonialism is that
non-European societies thrive under normal European administration, at least
in comparison to their condition under native rule"_ in the above essay and
read for a bit from there. His conclusion is that _"...to assert that their
average quality of government service was anything but far better than either
their predecessors, or their successors, is a political distortion of history
which I have no trouble at all in comparing to Holocaust denial."_

~~~
jdp23
Right. It's worked out soooo well for Native Americans here in the US. Except
for the whole smallpox thing. And the reservations. And the massacres. And the
Interior Department.

~~~
anamax
> Right. It's worked out soooo well for Native Americans here in the US.
> Except for the whole smallpox thing. And the reservations. And the
> massacres. And the Interior Department.

The US didn't colonize NA land. We took it and "gave" them reservations, which
we mostly ignore.

They'd be better off as colonies or independent. As colonies, we'd care about
getting a return on our investment. As independent, they'd benefit from
whatever development that they did.

~~~
waterlesscloud
Only vaguely related, but I've heard it explained that the term "reservation"
derives from the idea that it's land that the Indians "reserved" for
themselves, rather than ceding in treaties.

Now, that's of course a distortion of the forces at work that caused the so-
called reservation of lands to be necessary, but there's also some
contemporary value to Indian leaders in restoring that sense of meaning to the
word today.

~~~
protomyth
Well, I can tell you that the land picked for reservations was not picked by
the tribes. Mostly it is not the best or nicest. Some tribes got lucky because
of what was discovered later. I would need a source cited who thinks this
interpretation of the word would be good for a tribal leader.

~~~
waterlesscloud
The source cited is me. I think it would have value as a method of
strengthening a sense of autonomy.

There's a lot of difference in the idea of land someone else reserved for you
vs land you reserved for yourself.

The place where the land is will not be changing, but it's possible to change
the perception of what that land represents, and thus the benefits of that
land in a political sense.

~~~
protomyth
That is not part of the history, nor is does it jive with some of the ongoing
land claim. Changing wording and trying to convince people that something that
didn't happen did does nothing except base your leadership and cause in a lie.
Changing perception is only a good thing when it brings you closer to the
truth of a situation, not clouds future decisions in more fog.

~~~
waterlesscloud
The point is that it is in fact a part of the history.

Perhaps only nominally so originally, but that doesn't mean it can't be used
to advantage now.

~~~
forensic
Denying the truth doesn't motivate or cause cohesion. A vision of a brighter
future with opportunity and prosperity does.

------
thisrod
The most interesting part of this is the irrational thinking it exposes in the
developed world.

What's the difference between extending Canada to include a bit of Africa, and
letting more Africans move to the existing Canada? I think it's pretty minor.
Then why would Canadians bother with Romer's plan, when they could simply
relax their immigration laws?

~~~
izendejas
That's a valid observation.

Surely, immigration is good for the home country of the emigrants economically
speaking (think remittances, entrepreneurs going back, etc). This, I'd argue,
is indeed better than foreign aid. But what Romer is arguing is that his model
is meant to change the rules and bring the ideas to the country. As an
immigrant, what would be the point of moving to Canada and learning new
models/ideas if when you go back, you won't have the power to change them and
expose others to them under the same circumstances?

------
kragen
Honduras recently amended its constitution to permit the creation of Regiones
Especiales de Desarrollo, following Romer's ideas:
[http://www.congreso.gob.hn/contenido/1640-cronologia-del-
nac...](http://www.congreso.gob.hn/contenido/1640-cronologia-del-nacimiento-
de-una-ciudad-modelo-en-honduras)

~~~
iwwr
Special economic zones are a convenient way for host nations to introduce
reforms gradually and in constrained areas. The flow of kickbacks and bribery
can continue in the mainland, while new laws and rules are developed in the
SEZ islands. Even better, the political oligarchy can receive rents from these
new areas if they become successful.

~~~
kragen
That's a very positive way to look at it. But bribery is not the only aspect
of normal politics you can leave behind in your special economic zone; you can
also abridge, for example, import tariffs, labor laws, _accountability_ for
political corruption, and environmental regulations.

------
_delirium
Here's the project's website: <http://www.chartercities.org/>

------
emit_time_n3rgy
This reminds me of this Journeyman documentary subject on the plans of Chinese
business-persons to develop a Swedish town into a large commercially thriving
community - <http://www.journeyman.tv/61449/documentaries/chinatown.html>

Not poverty-reduction-related but does relate to the subject in a different
way..

------
wladimir
When I read "Politically incorrect", I was thinking of Jonathan Swifts' "A
modest proposal" (<http://art-bin.com/art/omodest.html>)

------
jcampbell1
not hacker news.

