Free Cities in the Middle East

Omar Al-Ubaydli wrote an article arguing the Middle East should embrace Charter Cities. He sees Paul Romer’s appointment as Chief Economist of the World Bank as an opportunity to pursue more radical reforms than otherwise available. Omar is right about the need for the Middle East to pursue autonomous cities, but they are likely to be administered privately, rather than by a developed country.

The Middle East has the largest concentration of new city projects. Dubai was the first and most successful. More recent examples include Masdar and King Abdullah Economic City. The new city projects tend to be built privately, like King Abdullah Economic City, or through public private partnerships.

Unfortunately, most of the new city projects took the wrong lessons from Dubai. They saw Dubai’s magnificent architecture and thought, “to build a new Dubai we just need to build amazing buildings.” What they fail to realize is that Dubai’s buildings did no cause its success, but are rather a consequence of it. Dubai became successful by creating special economic zones to attract investment. Their financial center, for example, runs under common law.

The future of free cities in the Middle East most likely lies with proprietary cities, private autonomous cities. The new city projects will learn, hopefully not too slowly, the importance of institutions in development. Privately financed projects are unlikely to abdicate administrative authority to a developed country. Rather they can simply hire a judge and adopt the institutions, retaining control while importing the best aspects of institutions of developed countries.

Leave a Reply