Economics/Class Relations

Honduras Ends Its Experiment With Charter Cities

By Brian Doherty, Reason

No more new ZEDEs will exist, after a unanimous congressional vote to end program; existing ZEDEs are optimistic their deals will be honored.

Honduras had been a pioneer in experimenting with what were called ZEDEs—”Zones for Employment and Economic Development” in English translation. But last week, in a depressingly unanimous vote, Honduras’ congress reversed the enabling law and constitutional amendment that made ZEDEs possible.

The ZEDE program was beloved by those in what’s known as the “charter cities” space—those who try to propagate unique set-aside spaces with different rules, ideally ones more friendly to economic growth or liberty or both. (Those in the field tend to see the two as buttressing each other.) The theory behind ZEDEs had roots in the work of Nobel-winning development economist Paul Romer, on how institutions and laws were vital to sustainable economic growth.

The ZEDE program was a long time coming, and faced many roadblocks and detours along the way. As Ian Vasquez, director of the Center for Global Liberty and Prosperity at the Cato Institute, tells Reason, Latin America has seen a resurgent socialist radicalism lately that has had ZEDEs in their sights.

Socialists “are fairly effective when they see something they don’t like, doing every thing they can to destroy it, by any means possible,” says Vasquez, including spreading false claims that ZEDEs would “destroy the livelihoods of people.”


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