In a new report for the Institute of Economic Affairs, Economist
Vera Kichanova argues that the UK could and should create new
self-governing cities like Hong Kong within its borders, to drive
growth and prosperity.
Kichanova, a Senior Economist at the Free Cities Foundation,
examines examples from across the world where new private and
self-governing cities, special economic zones (SEZs) and special
administrative regions (SARs) have had huge success in delivering
prosperity to their people and the areas in which they are
situated.
She criticises the freeports policy of recent years in the UK for
being used as a political tool and merely adding another layer of
bureaucracy in order to rebalance economies towards certain areas
and industries, rather than removing excessive regulation and
administration to allow the market to flourish.
Meanwhile, the global context has shifted. The next-generation of
special jurisdictions are characterised by wider self-governing
autonomy, enhanced role of the private sector and a mixed-use
urban strategy that moves beyond the outdated model of
single-industry focus. The UK should not ignore these
developments.
As of 2020, Hong Kong's GDP per capita was above $45,000 – more
than that of the UK, Canada or Japan, and more than four times as
much as that of mainland China. Britain played a vital role in
this economic success, so should be able to repeat the feat on
its own soil. Its strong institutions of democracy, rule of law
and property rights make it fertile ground.
In addition to the direct economic benefits, a self-governing
city in the UK could create a liveable community and would unlock
opportunities for more regulatory innovation on a local scale,
allowing experimentation with policies in contentious areas such
as planning. Successes could then be replicated nationwide with a
strong evidence base.
While innovations in this field bring benefits across the world
today, there are also plenty of historical precedents – including
in the UK. The City of London, Canary Wharf, and industrial
communities like Bournville have all exhibited aspects of private
administrations and special economic zones to beneficial effect.
The success this approach is driving internationally is as
widespread as Honduras and South Korea. SARs are used in
developing nations to deliver in places the state cannot – there
are 15 under development in Africa. However, others that have
been founded through land expropriation undermine their own
purpose. Special economic zones create prosperity through the
respect for property rights and the rule of law, if this is
undermined in their founding their success will be limited.
Senior Economist at the Free Cities Foundation and author
of ‘Beyond Freeports' Vera Kichanova said:
“There's no need to reinvent the wheel — these strategies have
already delivered spectacular results elsewhere. The UK has the
potential to create its own Hong Kong — perhaps even multiple
ones — within its borders. Compared to the achievements seen
around the globe, the current freeports model feels uninspired.
By leveraging our rich urban heritage, we can develop zones of
exceptional economic growth and innovation right here at home.”
Editorial Director at the Institute of Economic Affairs
Kristian Niemietz said:
"This is one of those proposals which may sound very radical at
first, but it is really just a consistent application of the
principles of decentralisation, local self-governance,
market-like competition between political jurisdictions, and
experimentation with different models of governance. We hope that
readers who are interested in these ideas will find value in this
paper, even if they do not wish to go quite so far as the
author."
Patrik Schumacher, Principal of Zaha Hadid Architects
said:
“Vera Kichanova's groundbreaking policy paper on 'Hong
Kong-style' self-governing regions is a bold and visionary
blueprint for the UK's urban future. As an expert in urban
development, Kichanova masterfully highlights how freedom and
autonomy can unleash innovation, tackle persistent challenges
like the housing crisis, and position Britain as a global leader
in urban self-governance. With compelling examples from history
and contemporary successes, her proposal offers an inspiring
roadmap to transform the UK's cities into thriving, competitive
hubs of prosperity.”
Titus Gebel, Founder and President of the Free Cities
Foundation, said:
“Vera Kichanova shows in a convincing manner that the UK has
missed a chance when designing the Freeports according to a model
known since the 1960s. Globally, there are already several
thousand competitors with a similar offer. May this excellent
article serve as an impetus to reconsider the matter. The UK
still has a chance to leapfrog competing special economic zones
and create unique economic powerhouses on its own soils.”
About the Author
Vera Kichanova is a Senior Economist at the Free
Cities Foundation and a research fellow at the Centre for the
Study of Governance and Society at King's College London. She has
advised architects and municipalities across more than twenty
countries. Her past roles include working with Zaha Hadid
Architects in London, Atlas Network in Ukraine, and serving as an
elected municipal councillor in Moscow. She holds a PhD in
Political Economy from King's College London, a Master's in
Public Policy from the University of Oxford, and a BA in
Journalism from Moscow State University.
