Charter Cities: North vs. South Korea

Paul Romer on the impact of the institutional differences which have been tested for half a century on the Korean peninsula. NOKO is an excellent refutation of the argument that culture dominates rules “it won’t work to reform their government because their culture is so different”.

(…) There are many statistical measures of the large difference in the quality of life between the North and the South. One gripping visual indication comes from a satellite picture of the Korean peninsula at night. Compared to its neighbors, North Korea (outlined for clarity) seems like a black hole. South Korea, which looked like the North within living memory, is now a sea of lights.

Until the end of World War II, the North and South shared a common set of formal and informal rules, first as an independent nation, then under occupation by the Japanese. When the allies disarmed the occupying Japanese forces, Russia set up one system of government above the 38th parallel. The U.S. set up a different one below this arbitrary line on a map.


In today’s world, charter cities offer the best strategy—perhaps the only feasible strategy—for giving people the option to move to a place with a new system of government. Charter cities can also give the leaders of founding nations the chance to set up new systems of government that can, in the best case, do what better government did for South Korea, unleash the potential of the people who use its rules to connect with each other.

I’m wondering if a charter city on the Chinese border might offer a way forward for the North Korean peasants – if NOKO did not gun them down when attempting to cross over. As it stands China tolerates NOKO criminality in nukes and drugs because they fear a collapse which would lead to millions of starving immigrants.