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Article posted Jun 30 2013, 4:29 PM Category: Economy Source: The Freeman Print

Startup City Redux

Honduras: from RED to ZEDE to … Freedom?

A small country in Central America may just have created the freest cities in the world.*

This column reported in November 2012 on an effort in Honduras to establish a unique kind of special development region. These regions, called RED after their Spanish acronym, would have created new cities with unprecedented independence from the central government. The RED had many supporters in the Honduran government’s executive and legislative branches, who aimed to bring low taxes, free trade, and the rule of law to their fellow citizens. The judicial branch did not share the enthusiasm, however.

The Supreme Court, worried that the RED statute would allow foreign sovereigns to rule Honduran territory, struck it down as unconstitutional. The first effort to establish in Honduras what have been called “startup” cities thus died. But Honduran reformers did not give up.

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