Charter Cities And The Aerotropolis In Colombia

Abstract

Based on its income per capita, Colombia meets the World Bank criteria for classification as an upper middle income country, but it still has many of the earmarks of a developing country, including its high poverty rate (45%), high infant mortality (16 deaths per 1000 live births), and lower life expectancy (74 years) than most developed countries. The capital city, Bogota, contains one-fifth of Colombia’s population, which is typical of the “urban giantism” of developing countries. Colombia’s income inequality is acute, with the lowest decile of households receiving 0.8% of household incomes, while the highest decile receives 45%. This results in a Gini coefficient of 58 - the ninth highest in the world. The paradox is that while Colombia’s per-capita GDP and GNI indicate that it is an upper-middle income country, its poverty, income inequality, infant mortality rate, and other socioeconomic indicators look very much like those of a low-income country. This raises an interesting question: “How can Colombia continue its development, presumably toward becoming a high-income country, while it is addressing its disproportionate poverty levels and income inequality?”

This paper investigates the prospects and challenges of implementing two relatively new ideas in economic development. The first is the use of Paul Romer’s idea of charter cities to enhance economic development in Colombia. Charter cities could be used to create more dynamic enterprise zones than now exist in Colombia. Romer advocates that countries set aside currently uninhabited city-size special reform zones to be charter cities. These cities would have a charter or constitution which specifies the governing rules - good rules (or institutions) - which would be supportive of entrepreneurial activity and a robust business climate. Charter cities could presumably be like a “clean slate” without all the developing-country plethora of rules and regulations that hinder development in established cities such as Cairo and Mumbai. Romer cites the example of Hong Kong as an extraordinarily successful early type of charter city which was governed by different rules for 99 years before it was ceded back to the People’s Republic of China by Great Britain in 1997. The second type of development tool for Colombia explored in this paper is John Kasarda’s “aerotropolis.” An aerotropolis is a city built around an airport. Traditional cities sprang up around existing trade routes along navigable waterways or where road and railroads met and crossed. The twenty-first century equivalent of that, according to Kasarda, is where “highways in the sky” interact with productive facilities on the ground at or near airports to be part of an ever-growing global supply chain. In this paper, some possible locations for charter cities and aerotropolises in Colombia are explored and their economic impact is assessed. The paper concludes that both can assist Colombia in reducing poverty and income inequality, but with certain qualifications. It also suggests that a hybrid of the two, an aerotropolis that is also a charter city, can significantly contribute to Colombia’s economic development.