Charter city
Encyclopedia
A charter city is a city
in which the governing system
is defined by the city's own charter
document rather than by state, provincial, regional or national laws. In locations where city charters are allowed by law, a city can adopt or modify its organizing charter by decision of its administration by the way established in the charter. These cities may be administered predominantly by citizens or through a third-party management structure, because a charter gives a city the flexibility to choose novel types of government structure. Charter cities are similar in administrative structure to special administrative regions.
, cities which have not adopted a charter are organized by state law. Such a city is called a General Law City, which will be managed by a 5-member city council. A city organized under a charter may choose different systems, including the "strong mayor" or "city manager" forms of government. One example of abuse of the charter system was in Bell, California
. The charter was created after a little-noticed special election, where few voters understood what becoming a charter city meant. After a charter was approved, state laws limiting city salary no longer applied and City Manager Robert Rizzo gave himself a salary of $1.5 million for managing a city of about 36,000 people. As of June 2008, 112 of California's 478 cities are charter cities. A few examples include Newport Beach, Huntington Beach and Irvine
However, charter cities that are subordinate to the rules of larger institutions (such as provinces or nations) have limited flexibility to adopt new governance structures. Historical examples cover a broad range of charter cities, from virtually independent city-states to smaller municipalities which have limited administrative freedom. For example, the Hansa League port city of Lübeck
, Germany
was a chartered city, governed by an autonomous council of local burgesses. Similarly, the state of Pennsylvania
was founded after Charles II granted William Penn
a land charter in 1681.
Hong Kong
and Macau
both are current examples of special administrative regions, similar to charter cities, in China.
With the help of a guiding charter, cities may be able to avoid administrative inefficiencies and establish rules with alternate social motivations. Thus, one benefit of charter cities is the freedom they offer in establishment of rules of governance. For example, many charter cities, like Hong Kong and Singapore as cities, use alternative forms of property taxation. Because charter cities are often founded with a goal of large-scale urban development, efficient use of the city's limited land is of utmost importance, for both the economic sustainability of the citizens and the government units. Thus, rather than using the traditional tax on both property and land, charter cities may use land value taxation, which taxes only the value of land, thus not providing disincentives for development.
proposes founding many new charter cities in developing countries. Romer suggests that a developing country pass a law that sets aside a tract of land for a new charter city. This charter city would be administered by a developed third-party guarantor government, and citizens from the host country (and maybe other countries) could move in and out as they please. The point of the charter cities idea is to give citizens the choice about where they want to live and to provide the basic rules and amenities required for economic growth. Ideally, by establishing a city with highly-developed rules and governance in an underdeveloped region, living and working in a charter city may provide a closer and more attractive alternative to moving far away to more developed countries.
In Romer’s conception, there are three main actors in the creation of a charter city. First, there is the developing host country. The host country provides the land, and designates that land as a special reform zone, subject to the foundational set of rules. Second, the developed guarantor country administers the region, perhaps with a board of governors and an appointed chairman like the Federal Reserve System
in the United States. Third, the source country will be where the charter city’s residents come from. This may be predominantly from the host country, but there also may be a number of source countries.
In practice, some countries have been receptive to Romer's idea. Upon meeting with the president, Madagascar
considered creating two charter cities, but the plan was scrapped when the political leadership that supported the idea was removed from power. Most recently, the government of Honduras
has considered creating a charter city.
.
City
A city is a relatively large and permanent settlement. Although there is no agreement on how a city is distinguished from a town within general English language meanings, many cities have a particular administrative, legal, or historical status based on local law.For example, in the U.S...
in which the governing system
Governance
Governance is the act of governing. It relates to decisions that define expectations, grant power, or verify performance. It consists of either a separate process or part of management or leadership processes...
is defined by the city's own charter
Charter
A charter is the grant of authority or rights, stating that the granter formally recognizes the prerogative of the recipient to exercise the rights specified...
document rather than by state, provincial, regional or national laws. In locations where city charters are allowed by law, a city can adopt or modify its organizing charter by decision of its administration by the way established in the charter. These cities may be administered predominantly by citizens or through a third-party management structure, because a charter gives a city the flexibility to choose novel types of government structure. Charter cities are similar in administrative structure to special administrative regions.
Examples
For example, in CaliforniaCalifornia
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
, cities which have not adopted a charter are organized by state law. Such a city is called a General Law City, which will be managed by a 5-member city council. A city organized under a charter may choose different systems, including the "strong mayor" or "city manager" forms of government. One example of abuse of the charter system was in Bell, California
Bell, California
Bell is a city in Los Angeles County, California. Its population was 35,477 at the 2010 census, down from 36,664 in the 2000 census. Bell is located on the west bank of the Los Angeles River and is a suburb of the city of Los Angeles...
. The charter was created after a little-noticed special election, where few voters understood what becoming a charter city meant. After a charter was approved, state laws limiting city salary no longer applied and City Manager Robert Rizzo gave himself a salary of $1.5 million for managing a city of about 36,000 people. As of June 2008, 112 of California's 478 cities are charter cities. A few examples include Newport Beach, Huntington Beach and Irvine
However, charter cities that are subordinate to the rules of larger institutions (such as provinces or nations) have limited flexibility to adopt new governance structures. Historical examples cover a broad range of charter cities, from virtually independent city-states to smaller municipalities which have limited administrative freedom. For example, the Hansa League port city of Lübeck
Lübeck
The Hanseatic City of Lübeck is the second-largest city in Schleswig-Holstein, in northern Germany, and one of the major ports of Germany. It was for several centuries the "capital" of the Hanseatic League and, because of its Brick Gothic architectural heritage, is listed by UNESCO as a World...
, Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
was a chartered city, governed by an autonomous council of local burgesses. Similarly, the state of Pennsylvania
Pennsylvania
The Commonwealth of Pennsylvania is a U.S. state that is located in the Northeastern and Mid-Atlantic regions of the United States. The state borders Delaware and Maryland to the south, West Virginia to the southwest, Ohio to the west, New York and Ontario, Canada, to the north, and New Jersey to...
was founded after Charles II granted William Penn
William Penn
William Penn was an English real estate entrepreneur, philosopher, and founder of the Province of Pennsylvania, the English North American colony and the future Commonwealth of Pennsylvania. He was an early champion of democracy and religious freedom, notable for his good relations and successful...
a land charter in 1681.
Hong Kong
Hong Kong
Hong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...
and Macau
Macau
Macau , also spelled Macao , is, along with Hong Kong, one of the two special administrative regions of the People's Republic of China...
both are current examples of special administrative regions, similar to charter cities, in China.
Governance and administrative structure
The range of what is considered a "charter city" may lead to definitional ambiguities. Most times, however, a charter city is founded by charter before large-scale development takes place. While a city may adopt a new "charter" long after its first codification of rules, as in the cases of many cities in California, generally the designation of a charter city is reserved for those municipalities whose charter guides development decisions or influences the creation of social structure from the beginning, as in the case of Hong Kong. A charter city may have some exemptions from some state or provincial laws, which varies entirely for each particular region.With the help of a guiding charter, cities may be able to avoid administrative inefficiencies and establish rules with alternate social motivations. Thus, one benefit of charter cities is the freedom they offer in establishment of rules of governance. For example, many charter cities, like Hong Kong and Singapore as cities, use alternative forms of property taxation. Because charter cities are often founded with a goal of large-scale urban development, efficient use of the city's limited land is of utmost importance, for both the economic sustainability of the citizens and the government units. Thus, rather than using the traditional tax on both property and land, charter cities may use land value taxation, which taxes only the value of land, thus not providing disincentives for development.
Development potential
Economist Paul RomerPaul Romer
Paul Michael Romer is an American economist, entrepreneur, and activist. He is currently the Henry Kaufman Visiting Professor at New York University Stern School of Business and will be joining NYU as a full time professor beginning in 2011...
proposes founding many new charter cities in developing countries. Romer suggests that a developing country pass a law that sets aside a tract of land for a new charter city. This charter city would be administered by a developed third-party guarantor government, and citizens from the host country (and maybe other countries) could move in and out as they please. The point of the charter cities idea is to give citizens the choice about where they want to live and to provide the basic rules and amenities required for economic growth. Ideally, by establishing a city with highly-developed rules and governance in an underdeveloped region, living and working in a charter city may provide a closer and more attractive alternative to moving far away to more developed countries.
In Romer’s conception, there are three main actors in the creation of a charter city. First, there is the developing host country. The host country provides the land, and designates that land as a special reform zone, subject to the foundational set of rules. Second, the developed guarantor country administers the region, perhaps with a board of governors and an appointed chairman like the Federal Reserve System
Federal Reserve System
The Federal Reserve System is the central banking system of the United States. It was created on December 23, 1913 with the enactment of the Federal Reserve Act, largely in response to a series of financial panics, particularly a severe panic in 1907...
in the United States. Third, the source country will be where the charter city’s residents come from. This may be predominantly from the host country, but there also may be a number of source countries.
In practice, some countries have been receptive to Romer's idea. Upon meeting with the president, Madagascar
Madagascar
The Republic of Madagascar is an island country located in the Indian Ocean off the southeastern coast of Africa...
considered creating two charter cities, but the plan was scrapped when the political leadership that supported the idea was removed from power. Most recently, the government of Honduras
Honduras
Honduras is a republic in Central America. It was previously known as Spanish Honduras to differentiate it from British Honduras, which became the modern-day state of Belize...
has considered creating a charter city.
See also
- Chartered cities of EthiopiaAdministrative divisions of EthiopiaEthiopia has the following administrative divisions:-Regions and chartered cities:The 9 regions or killoch are based on ethnic territoriality:*Afar*Amhara*Benishangul-Gumuz*Gambela*Harari*Oromia*Somali...
- Southern African special administrative region
- Dillon's Rule
- Home ruleHome ruleHome rule is the power of a constituent part of a state to exercise such of the state's powers of governance within its own administrative area that have been devolved to it by the central government....
- Free imperial cityFree Imperial CityIn the Holy Roman Empire, a free imperial city was a city formally ruled by the emperor only — as opposed to the majority of cities in the Empire, which were governed by one of the many princes of the Empire, such as dukes or prince-bishops...
- Special Administrative Regions
- Urban Enterprise ZoneUrban Enterprise ZoneIn the United States, Urban Enterprise Zones , also known as Enterprise Zones, are intended to encourage development in blighted neighborhoods through tax and regulatory relief to entrepreneurs and investors who launch businesses in the area. UEZs are areas where companies can locate free of...
- City-stateCity-stateA city-state is an independent or autonomous entity whose territory consists of a city which is not administered as a part of another local government.-Historical city-states:...
- MicronationMicronationMicronations, sometimes also referred to as model countries and new country projects, are entities that claim to be independent nations or states but which are not recognized by world governments or major international organizations...
Further reading
Discussion of Dillon's rule, charter cities and home rule in New MexicoNew Mexico
New Mexico is a state located in the southwest and western regions of the United States. New Mexico is also usually considered one of the Mountain States. With a population density of 16 per square mile, New Mexico is the sixth-most sparsely inhabited U.S...
.
External links
- California State Constitution, Article 11: Local government
- Charter Cities global Information
- The Atlantic: The Politically Incorrect Way to End Poverty
- Podcast with Paul Romer about Charter Cities
- Technology Entertainment Design video with Paul Romer about Charter Cities
- "A Quick Case for Charter Cities: Memo to the Gates Foundation" by Bryan Caplan