• Research
  • Emissary
  • About
  • Experts
Carnegie Global logoCarnegie lettermark logo
DemocracyIran
  • Donate
{
  "authors": [
    "Milan Vaishnav",
    "Justin Sandefur"
  ],
  "type": "legacyinthemedia",
  "centerAffiliationAll": "dc",
  "centers": [
    "Carnegie Endowment for International Peace"
  ],
  "collections": [],
  "englishNewsletterAll": "ctw",
  "nonEnglishNewsletterAll": "",
  "primaryCenter": "Carnegie Endowment for International Peace",
  "programAffiliation": "SAP",
  "programs": [
    "South Asia"
  ],
  "projects": [],
  "regions": [
    "North America",
    "South America"
  ],
  "topics": [
    "Economy"
  ]
}

Source: Getty

In The Media

Three Questions about Honduras’s New Charter City

Honduras has altered its constitution to open the way to building a new “Special Economic Zone," but this charter city raises some important questions.

Link Copied
By Milan Vaishnav and Justin Sandefur
Published on Jun 14, 2012
Program mobile hero image

Program

South Asia

The South Asia Program informs policy debates relating to the region’s security, economy, and political development. From strategic competition in the Indo-Pacific to India’s internal dynamics and U.S. engagement with the region, the program offers in-depth, rigorous research and analysis on South Asia’s most critical challenges.

Learn More

Source: Center for Global Development

One of the biggest experiments in development economics is about to begin on Honduras’s Northern Coast.  Honduras has altered its constitution to open the way to ceding a large tract of land to build a new “Special Economic Zone”, modeled on NYU economist Paul Romer’s idea of charter cities — new cities, built up from scratch, where first-world institutions and third-world immigrants can meet and do business.

CGD has close ties to this idea.  Romer is a CGD non-resident fellow, and CGD president Nancy Birdsall and senior fellow Michael Clemens are both associated with the Transparency Commission that will oversee the Honduran experiment.  CGD does not take institutional positions though, and as anyone who’s visited an internal seminar or staff lunch knows, there’s room for vigorous debate.

Back in April, the members of the Transparency Commission met here in DC, and over lunch CGD staff had a chance to hear them explain their ideas for the city and ask questions.  Since then, there’s been an active debate in the hallways here about the charter city model.  We want to take that debate into the public domain.  To kick things off, here are three questions that we think proponents of the Honduran initiative need to grapple with.

  • Democracy: Is the charter city model at odds with principles of accountability and democracy?
  • Time inconsistency: Can Honduras credibly commit to investors that the rules of the zone won’t change?
  • History and context: Is it realistic to talk about creating an institutional blank slate in the Honduran jungle?

Our musings on these questions got a bit long for the blog, so we’ve posted them as a CGD essay where we explain some of our concerns in more detail and offer a couple of ideas to address them.

This article originally appeared at the Center for Global Development.

About the Authors

Milan Vaishnav

Director and Senior Fellow, South Asia Program

Milan Vaishnav is a senior fellow and director of the South Asia Program and the host of the Grand Tamasha podcast at the Carnegie Endowment for International Peace. His primary research focus is the political economy of India, and he examines issues such as corruption and governance, state capacity, distributive politics, and electoral behavior. He also conducts research on the Indian diaspora.

Justin Sandefur

Center for Global Development

Authors

Milan Vaishnav
Director and Senior Fellow, South Asia Program
Milan Vaishnav
Justin Sandefur
Center for Global Development
EconomyNorth AmericaSouth America

Carnegie does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.

More Work from Carnegie Endowment for International Peace

  •  A machine gun of a Houthi soldier mounted on a police vehicle next to a billboard depicting the U.S. president Donald Trump and Mohammed Bin Salman, the Crown Prince and Prime Minister of Saudi Arabia, during a protest staged to show support to Iran against the U.S.-Israel war on March 27, 2026 in Sana'a, Yemen.
    Collection
    The Iran War’s Global Reach

    As the war between the United States, Israel, and Iran continues, Carnegie scholars contribute cutting-edge analysis on the events of the war and their wide-reaching implications. From the impact on Iran and its immediate neighbors to the responses from Gulf states to fuel and fertilizer shortages caused by the effective shutdown of the Strait of Hormuz, the war is reshaping Middle East alliances and creating shockwaves around the world. Carnegie experts analyze it all.

  • President of Argentina Javier Milei walks among supporters during his arrival to a closing campaign rally ahead the mid-term election on October 23, 2025 in Rosario, Argentina.
    Paper
    Right-Wing Populism and Strategic Realignment: Argentina’s Milei Experiment

    Argentina’s president blends libertarian populism with leader-centric diplomacy, transnational right-wing networks, and selective disengagement from multilateral institutions.

      Federico Merke

  • Commentary
    Southeast Asia’s Agency Amid the New Oil Crisis

    There is no better time for the countries of Southeast Asia to reconsider their energy security than during this latest crisis.

      Gita Wirjawan

  • Commentary
    Fuel Crisis Forces Politically Perilous Trade-Offs in Indonesia

    As conflict in the Middle East drives up fuel costs across Asia, Indonesia faces difficult policy trade-offs over subsidies, inflation, and fiscal credibility. President Prabowo’s personalized governance style may make these hard choices even harder to navigate.

      Sana Jaffrey

  • Commentary
    Emissary
    In Its Iran War Debate, Washington Has Lost the Plot in Asia

    The United States ignores the region’s lived experience—and the tough political and social trade-offs the war has produced—at its peril.

      Evan A. Feigenbaum

Get more news and analysis from
Carnegie Endowment for International Peace
Carnegie global logo, stacked
1779 Massachusetts Avenue NWWashington, DC, 20036-2103Phone: 202 483 7600Fax: 202 483 1840
  • Research
  • Emissary
  • About
  • Experts
  • Donate
  • Programs
  • Events
  • Blogs
  • Podcasts
  • Contact
  • Annual Reports
  • Careers
  • Privacy
  • For Media
  • Government Resources
Get more news and analysis from
Carnegie Endowment for International Peace
© 2026 Carnegie Endowment for International Peace. All rights reserved.