How to Grow A City in Honduras, Part III: The Skeptics

Honduras is one of the poorest countries in Central and South America. It has the highest murder rate in the world, almost double the next closest contender. It's a place ravaged by the drug trade and political instability, where as recently as 2009 the military ousted a president pushing to modify the constitution in order to extend his own term. It may seem like the last place on earth where businesses would want to invest, and people would want to move.

But there's a new idea about to be tried in Honduras.

Some call it a Startup City or Free City, others a LEAP Zone, and in Honduran law it's known as a ZEDE. They are politically autonomous, privately run zones that supporters believe could transform not only Honduras, but the entire developing world.

In "The Skeptics," the third episode in a four-part series, critics of the Honduran ZEDEs voice their concerns as the idea moves from concept to reality. Academics and pundits who accuse former advocate Paul Romer of advocating "neocolonialism" and worry about "Ayn Randia" coming to fruition in the Central American jungle, while many Honduran citizens say that their skepticism arises from their deeply ingrained distrust of the Honduran national government.

There is internal tension as well, between the "experimenters" who dream of startup cities as laboratories from which the best ideas can emerge and hard-nosed political realists like Mark Klugmann, a member on the board responsible for greenlighting Honduran ZEDE proposals, who calls for "institutional leapfrogging," wherein the zones import tried-and-true governance systems from other countries.

"The problems are pretty clear. You have a country where 75,000 people essentially risk their lives, in many cases get into debt with very dangerous organizations that will try to smuggle them into the U.S.," says Klugmann. "To say that this project should be focused on things that are experimental? No, sir."

Watch the video above, and check out the rest of the series here. Part I introduces the key players and concepts behind the Honduran ZEDEs and the broader startup cities movement. Part II explores already existing examples of experimental governance in Honduras, including entire towns commissioned and governed by private companies. And Part IV looks forward with some entrepreneurs who've already sketched out a business plan for what they hope will be one of the first Honduran startup cities. Or, watch the whole thing here.

Approximately 6 minutes. Produced by Zach Weissmueller and Ross Kenyon. Edited by Weissmueller and Kenyon. Music by Chris Zabriskie.

Visit for downloadable versions of this video, and don't forget to subscribe to Reason TV's Youtube channel for more content like this. This project was coproduced with the Moving Picture Institute.