This week, we want to further the learning associated with Alex Tabarrok on Private Cities.

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1. How are charter cities, as envisioned by Paul Romer, different from private cities? Which has greater potential for encouraging entrepreneurial investment? For reducing transaction costs? Explain.

2. In his postscript (1:03:09) to this week’s episode, Roberts suggests that while he thought Tabarrok “got the economics right,” he preferred a different version of what exactly the Coase Theorem is. How do Tabarrok’s and Roberts’s explanations of the Coase theorem differ? Revisit Roberts’s conversation with Coase shortly before he died. Whose explanation would Coase be more sympathetic to? What evidence from the conversation supports your answer?

3. Given the successes and failures of Gurgaon, explain what might be a good dividing line for what cities achieve through municipal government and what should be left to emerge from the bottom up. How might such a description be used to suggest policy changes to make existing cities with active municipal government better?