Another Blow to the Cause of Honduran "Free Cities": Future Cities Development Organization Closing Up Shop

Future Cities Development, a company dedicated to helping create "free cities" within the nation of Honduras to demonstrate the business and social advantages of competitive governance, has folded.

From their announcement:

In July 2011, Honduras amended their constitution[1] to create the world's first free city program.  Passing with a vote of 126-1, the RED[2] program was intended to create new cities on empty land with semi-independent governance systems[3] under Honduran and international oversight.

Because we share a deep passion for innovative governance, we responded by founding Future Cities Development in August of 2011.  We saw the historically unprecedented program as a compelling and urgent opportunity to improve economic prospects for Hondurans and put our principles into action.

Unfortunately, the early political momentum for the RED program faltered, and the program's implementation suffered a number of setbacks and delays over the last year.  These culminated in the October 18th, 2012 ruling by the Honduran Supreme Court that the RED legislation was unconstitutional, by a vote of 13-2.

As a result, we no longer see any imminent development prospects in Honduras. Since our funding was contingent on making substantial progress within a year, we are winding down the company and returning our remaining funds to our investors. We thank them for their support of our work towards a better world for all.

While we are saddened that the RED program did not materialize, we are proud to have participated and learned much from the experience. We remain convinced that free city initiatives are the most promising strategy for alleviating global poverty. 

Even before the Supreme Court's bad decision, the immediate prospects for getting actual "free cities" moving in Honduras were seeming grim. The government, after its initial hugely popular vote to theoretically create a RED program, failed to define the actual boundaries or locations of such zones, or get moving with official appointments of either a Transparency Commission or an executive governor for the project.

I blogged about the initial bad Supreme Court decision putting the kibosh on the Honduran private city idea in early October; that decision was merely by a five-judge panel, and was upheld by the full court later in October. That post also discusses controversy over whether a Transparency Commission was or was not officially created. Charter cities guru Paul Romer thought there was one, and that he was running it, though the Honduran government disagreed.

I blogged about the launch of Future Cities Development back in December 2011. It was founded by Patri Friedman, grandson of Milton and son of David, and already a pioneer in experimenting with competitive governance through the Seasteading Institute. I wrote at length about Seasteading, in Reason back in July 2009. Friedman is writing a book on Seasteading for Simon & Schuster.