How new technologies and management models will radically transform municipal governance as we know it.
by Francisco Litvay
When it comes to updating the way they operate, governments are lagging behind private-sector organizations. While companies are constantly innovating in their organizational models, most cities are still running on centuries-old frameworks. But what if we could run local governments more like companies?
New legal frameworks can also be viewed as social technologies. Think of Smart Cities and E-Governance platforms as dealing with the “hardware side.” For example, smart grids, lighting, and transportation services have all become more efficient due to innovation. We have seen a lot of progress in the stuff of cities, but the fundamental ways cities are governed and operated remains in amber.
In other words, law and administration are the operating systems of cities, and they’re long overdue for an upgrade.
What we should be focusing on, then, is the software component. It won’t do us much good if we have 21st century digital platforms if they are running on legal systems from the 19th century. We’re overdue for innovation.
The problem is that our current juridical structures are too rigid to innovate. If we want government to be innovative, we should look at how startups innovate.
“They’re small, experimental, and responsive,” said Max Borders, author of The Social Singularity. “If they fail, they provide experience; if they succeed, they create prosperity.”
Borders is part of the Startup Societies movement, which calls for more experimentation in governance. The small country of Liberland, the floating platform concepts of the Seasteading Institute, and charter cities all belong under this umbrella. Why? They have one thing in common: they’re trying to bring competition to the public sphere by treating governance services as a market phenomenon.
That might seem a little radical to some, but consider this is already happening to a degree.
Homeowners associations (HOAs) and condominiums are booming in the US, both in residents in these forms, as well as scope of services they provide. Innovative cities like Sandy Springs, Georgia have proved it’s possible to have the private sector deliver city services. And many Special Economic Zones are already counting on private companies for their security.
With the increased adoption of Special Economic Zones (SEZs), the room for territorially limited experiments in governance is getting bigger. Around the world, almost 80 percent of all countries currently have a SEZ of some kind. Some countries even have multiple SEZs competing with one another. It’s only a matter of time before a private company launches its own startup city.
Some are already venturing into this space…
Meet Titus Gebel, CEO of Free Private Cities. He is attempting to realize the idea of cities run like businesses. To realize it, he seeks to establish an autonomous special zone run by an operating company, which he says will bring the entrepreneurial spirit into the public sector.
“This is a completely new model of living together” Gebel said. “These cities will have an economic incentive to be innovative. Instead of being suffocated by outdated regulations, innovators will be drawn to a legal framework that’s adapted to their needs. That’s how you create prosperity.”
Gebel has already had his chance to work with some of the newest available e-governance technologies, including those being developed for autonomous zone projects in Central America. These models use blockchain as a method of proof for property transactions, going far beyond traditional ownership. “Owners can directly trade air rights, pollution and emission rights which each other, without the need to involve a government intermediary”, he reports.
“There are structural changes happening in the public sphere,” adds Gebel. “More disruptive technologies, such as blockchain, are increasing the scope of decentralization, openness and self-determination in government. That impacts the way we think of cities.”
Decentralization is certainly looking like the new imperative. He and others are already following projects with this approach, such as the Ulex Open Source Legal System, which is essentially Cloud Common Law. Another example is Bitnation, which issues passports for world citizens and enables non-territorial jurisdictions. Even management is getting impacted with new organizational forms like Holacracy.
Gebel is also hopeful about the use of distributed ledgers for more participatory governance:
“The possibility to establish smart contracts when dealing with the city government makes life easier and less bureaucratic. The distributed ledger technology saves notaries, public registrars and a lot of time, e.g. for property transactions. And the more you can decide by yourself, the less need there is for representative bodies, which, as we all know, over time tend to develop their own interests”
But Gebel is skeptical of viewing these systems as the only factor of development. He thinks it’ll take a fundamental paradigm shift from the imposed legal frameworks of the Ancien Régime, to the bold, adaptive frameworks of a competitive governance marketplace.
Is this going to work?
Only time will tell. But the future of governance is changing before our very eyes—and your mayor might not like it.