With the current rancor about Washington, DC's budget autonomy, I wanted to weigh in on a different but related point. I don't necessarily think that the Free City Model is the best idea for increasing DC's budget autonomy, rather than statehood or other proposals. What I hope this post can address is the potential benefits of using the free city model and the increased potential for Washington, DC as a laboratory of democracy, to use the overused phrase.
There is a large consensus within the economics literature that the programs that affect the least well-off often do not do well by them. From zoning restrictions that limit how dense a city may become (and therefore how many low-income and non-working people can afford to live there) to permitting requirements that artificially increase the cost of opening and maintaining a business. Or occupational licensing that artificially raises the price of entering multiple professions. Mercatus estimates that each regulation costs each worker about $13,000 each year.
Economics also shows that in addition to regulations removing opportunities for people in poverty, the programs that we have designed to support those who experience poverty and disability--the social welfare system--does a relatively poor job at 1) reaching those in need 2) providing responsive and individualized support 3) respecting the dignity and worth of the participant 4) coordinating across agencies to present a coherent system 5) helping people achieve their plans for a better life.
It's from this last point that I draw most of my affection for this idea because it's where my research and policy knowledge lies. I think of how different policy advocacy would be if we had the ability to radically change systems in the interest of our target populations. I understand that on the federal level, this is still possible. FAP wasn't long ago. Participant-Directed Medicaid is federally-driven. But in the aggregate, federal policy changes on the largest social welfare programs inch gradually, with some fluctuation, to lower efficiency, cost shifting onto participants, and more stringent regulation.
What I believe the free city model would offer me as a policy advocate is a higher likelihood of implementing policies I believe to best help individuals experiencing poverty. Basic income will not happen in the current system unless Milton Friedman's reanimated corpse runs for president (I'd vote for him). But under a free city model that allows significant autonomy, a highly informed populous with high incomes could provide a fertile ground for evidence-based policy to take hold.
Washington, DC is in a unique space. It is an incredibly liberal town that legalized gay marriage as well as medical and recreational marijuana at the outset of these movements. It's population includes some of the highest informed individuals as well as a significant divide between the people with money and the people without money, who are slowly being pushed out of the city.
Washington, DC also retains a degree of autonomy that is currently under debate. As Eleanor Holmes Norton chastises her colleagues, there is a policy problem that is ripe for a good solution. For those on the right, Free Cities have been a source of inspiration and study for the last decade. The ideas for Free Cities undergird the Seasteading Institute and have been implemented (after lengthy litigation) in Central America and throughout the world. The promise of a low-tax, highly efficient city would work well for senators on the right side of the aisle who are pro-economic freedom.
While the model of free cities imposes free market capitalism by appointed technocracy (because somehow that's less corrupt than democracy?), there is no reason that Washington DC couldn't go on using their existing, functional city government. Relax federal restrictions and allow the municipality to adopt the same federal codes or make changes that they feel might make more sense for their locality. Continue paying the same amount of funds in, but allow local control to a greater extent.
I don't know. Just a thought.
