Leaders in Honduras had all but bet on privatized cities as the country’s ticket to economic development, but last Wednesday the Honduran Supreme Court declared them illegal, the non-profit news service Common Dreams reports.

This might all sound like something out of a hypothetical urban policy case study, and in some ways it is (so far, at least). But Paul Romer, a prominent U.S. economist, has been pitching the idea that “charter cities” (i.e. cities with their own laws, separate from any existing governance structure) hold great hope for the world. This is the embodiment of using economics as an organizing principle for society. This isn’t austerity, per se, but it draws from the same well. Government can’t manage things (cities, in this case), so let’s step outside government, just create the structures we need to keep markets going, and let the invisible hand take over. Romer is proposing private cities. In many cities, there already exist private structures (police, water, transportation) that mimic public services the city itself struggles to provide. Romer’s idea is an extension of the same. Urban austerity – the starving of the city government’s ability to provide services – is both the driver and the result of such privatizing.

This article by New American City has some background, to go straight to the horse’s mouth visit Romer’s site: Charter Cities.

Or watch his TED talk:

via Honduras Supreme Court: No Charter for You – Next American City.