How to Grow a City in Honduras, Part IV: Citizens as Shareholders

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 "Citizens as Shareholders," the final episode in a four-part series, entrepreneurs behind a company called Elevator Cities share their vision of what they hope will be one of Honduras' first ZEDEs. They plan to have a private security force, voting based on "shareholder" status that residents can earn by opening a business or owning land inside the zone and implementing a completely automated "smart contract" system both for executing agreements and engaging in arbitration.

If we are able to really show people that this is for real and that Honduras are serious about not interfering, then I think we can do something amazing," says Gabriel Delgado, CEO of Elevator Cities.

While there's no guarantee that the Committee for the Adoption of Best Practices will approve Elevator Cities' proposal, the next few months will be telling for the future of the ZEDEs and the broader startup cities project as the first zones get approval and begin to break ground.

"If this can be made to work and attract investment and resolve all of the other potential issues, I expect to see in the next 10 to 20 years, literally first dozens and then perhaps hundreds of similar experiments around the world that will accelerate the end of poverty more rapidly than probably anyone can imagine," says Elevator Cities President Michael Strong.

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. Part III delves into the history of the Honduran ZEDEs and highlights both past and current criticism of the project. Or, watch the whole thing here.

Approximately 5 minutes. Produced by Zach Weissmueller and Ross Kenyon. Edited by Weissmueller. Music by Chris Zabriskie and Podington Bear.

Visit http://reason.com/reasontv 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 co-produced with the Moving Picture Institute.