Brian Doherty on the Latest Progress in 'Free Cities' in Honduras


Back in January, the new administration of Honduran President Juan Orlando Hernandez was hyping the possibility of what were now officially called Zones for Economic Development and Employment, or ZEDEs. The concept has been known by many names: charter cities, LEAP (for "Legal, Economic, Administrative, Political") zones, free cities, and startup cities. The general idea is creating zones within a country that can experiment with different economic, regulatory, and legal systems than the rest of the country—with the hope that these innovations might lead that sector to prosper more than the country at large.

Honduras is—again—a step closer to creating such zones. As interviews in July with many people involved in the process or watching it eagerly for signs of real progress showed, it's still many steps away from them becoming real. 

It's not surprising that the kind of radical, perhaps even desperate, experimentation that ZEDEs represent would get the most traction not in some place like Switzerland or Sweden, but a place exactly as troubled as Honduras, as a sort of Hail Mary pass to create some legal safety and economic sanity.

As Brian Doherty explains, the ZEDE concept has to fight against local hostility, government corruption, and a possible turn toward being merely business-friendly and not radically innovative on its way to reality.