A Charter City in Sweden

Link to Google Doc

A concept that has been growing increasingly popular, and which is now becoming a reality, the past years is charter cities. (See for example: Próspera, Orchidéa, and more) Charter cities are semi-autonomous cities, which often are built to attract tech-entrepreneurs and digital nomads. As such, part of the reason for wanting to create a charter city is the ambition to create new zones, or hubs, of rapid economic development, similar to what Silicon Valley has been to the US for the last decades. Therefore, many who are interested in charter cities feel that governments generally have done a poor job fostering innovation in the past decades. It also seems to be popular in the world of cryptocurrencies, where many feel that centralized institutions are the main reason for slower economic growth and more inequalities.

Creating a semi-autonomous city is one way of getting to solve the problem by oneself. This kind of arrangement also allows for trying all kinds of innovations in terms of institutions, where some charter cities are proposing solutions such as quadratic funding, monetary systems built on blockchains, and much more. Thus there is some utility for the rest of the world with charter cities, aside from taking part of eventual companies coming from these places. The charter cities could become experimental grounds for new kinds of institutions. Institutions that have been proposed by academics for many years, but that have never been tried in large scale experiments. 

Concepts such as quadratic voting, futarchy, and my own idea, Policy Dollars could be tried in charter cities and then exported to the rest of the world if they are proven successful. In my experience, much of the resistance towards such institutions come from some status quo bias, where people thinks it seems stupid to abandon institutions that have worked well in the past. Successful large-scale trials could therefore prove to be effective in convincing people of the need for innovation in institutions. Trying policies in smaller experiments before implementing them nationwide seems to be a good idea. A study done in Germany also found that a majority of people supported such experiments. It seems unlikely that Swedes would not also be in favor of such experiments. In light of this, I would like to propose that Sweden should allow the implementation of a semi-autonomous charter city near Stockholm. (My first crude suggestion is to convert Nynäshamn into a charter city.)

Why would the Swedish government allow this to happen? The benefits to Sweden are many. Sweden still enjoys a somewhat favorable status around the world and an autonomous zone with the possibility to experience new institutions and an environment created to enhance innovation could attract talent from around the world. This would increase the attractiveness of Sweden while further establishing the status of the Stockholm area as the Silicon Valley of Europe. Not only that, but the possibilities of letting the charter city be a place of policy experimentation would allow Sweden to become a leader in innovative policy. Any such experiment would of course be subject to quite some selection effects, since people need to choose to live in the charter city and it is reasonable to presume that it is mostly a certain kind of people who would choose to live in a charter city. Selection effects aside, experiments could still provide valuable insights to Sweden and the rest of the world. 

What makes Sweden a good place for the establishment of a charter city? There are numerous factors that are important here, but the most important part is infrastructure. Sweden already has advanced digital infrastructure and a vast pool of talent that could help create the foundation of the charter city. Similarly, Stockholm offers great opportunities in terms of capital, knowledge, and talents. 

I think the chances are slim that any Swedish government would allow this to happen. And the largest benefits of building charter cities on islands in the Pacific is that the cost of living is lower relative to the US and much of Europe. A charter city in Sweden would likely require high costs of living, a clear disadvantage. Still, it would likely be very valuable and the lead times on these kinds of projects are long. To stay ahead of the competition and reap the sweetest fruits, Sweden should act as soon as possible. 

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