04 May

Can you franchise a western city into the developing world? Honduras is about to find out.

I find this endlessly fascinating, because every time I read and think about it, I come out the other side with a different opinion. To whit, a charter city in Honduras will be adopting the governance model of Canada:

Honduras recently defined a new legal entity: la Región Especial de Desarrollo. A RED is an independent reform zone intended to offer jobs and safety to families who lack a good alternative; officials in the RED will be able to partner with foreign governments in critical areas such as policing, jurisprudence and transparency. By participating, Canada can lead an innovative approach to development assistance, an approach that tackles the primary roadblock to prosperity in the developing world: weak governance.


The RED offers a new way to think about development assistance, one that, like trade, relies on mutually beneficial exchange rather than charity. It’s an effort to build on the success of existing special zones based around the export-processing maquila industry. These zones have expanded employment in areas such as garments and textiles, with substantial investment from Canadian firms such as Gildan, but they haven’t brought the improved legal protections needed to attract higher-skilled jobs. By setting up the rule of law, the RED can open up new opportunities for Canadian firms to expand manufacturing operations and invest in urban infrastructure.

By participating in RED governance, Canada can make the new city a more attractive place for would-be residents and investors. It can help immediately by appointing a representative to a commission that has the power to ensure that RED leadership remains transparent and accountable. It also can assist by training police officers.

So on one hand, what comes to mind? Colonialism, right? Here would be a western nation literally running a piece of a developing world nation. That brings up a lot of troubling past. Missteps. What happens when the Canadians running this new Honduran city decide to unleash some of the unlawful police brutality exhibited during the G20 riots in Toronto? The legal fallout of which is still continuing. What will that look like?

But you read the article, and you see that this nation is thinking, we don’t have strong rule of law, and tradition, and maybe this is a way to jumpstart it. And when other cities see the prosperity of a smoothly running, high infrastructure city with great civics, they’ll adopt (consider the ripple effects Hong Kong/Singapore have) and spread.

Do it right, you have a central American Hong Kong. Do it wrong… ?

It’s Honduras making the call, and asking for this, though. They’re wanting to bootstrap more, and as far as civic effectiveness, Canada isn’t a bad model. It ranks highly on quality of life, governance, transparency, etc.

There’ll be some racists who hear this and cheer, the optics of a country asking for help bolster the case of ultra-nationalists. You can almost hear the pro-empire cackling of Niall Ferguson.

All of which creates a knee jerk ‘ach, no, self-determination.’

But the Hondurans know all that, and are willing to ask for this experiment anyway.

Which is what impresses me. If you’re not making something work, looking for a better solution is smart. Not invented here complex ruins many structures (businesses, governance) because their ego and price and nationalism and whatever dictate that someone else *can’t* do it better because *they’re someone else.*

The fact that Hondurans went out, looked for what they thought was the best model for running something, and are kinda hiring those people to help get it off the ground reminds me of reading about how when Singapore decided to figure out its healthcare system they sent experts to travel around the world, take a look at all the systems, and come back to implement what they figured worked best.

You have to admire that approach.

But it’s still wild. Franchising a city, basically. I’ll be following this for sure.