Paul Romer envisions a Hong Kong ... in Africa

He is one of the fathers of the new economic growth theory, he rocked the academic world in the early 90s, and he’s been on the shortlist for a Nobel price in economics ever since. His research introduced new ways of looking at innovation and the role of technology.

Now Professor Paul Romer at the Stanford University is making a surprise move. He has quit his teaching job at the Business School for a whole new career, one that may actually change the world. Professor Romer wants to try a huge political experiment in institution building and democracy.

“I am embarking on a whole new direction in my career. I am going to put my whole career on line with this new idea,” said Mr. Romer in a meeting at SRI International on Friday.

It sounds like a bold move, but Mr. Romer has done surprising things before, like when he created the Aplia company for online teaching support, a software company that changed academic teaching all over the U.S.

An academic moving into business? Almost unheard of. And now he is risking his reputation again.

“I don’t know if my alternative thinking will ever be accepted," he said. "Talking about these ideas will be fruitful.”

Romer’s new concept is to take chunks of land on Africa's coast and create well-run city-states along the lines of Hong Kong during the era of British colonial rule. He envisions a Nordic country, perhaps, emerging as a champion for is concept. The European country, he suggests, could accelerate economic growth by taking charge of the police force, jails and courts. Local government would take care of the rest.

A modern form of colonialism? Maybe, but the colonizer would be a "disinterested trustee government" who would preside over a form of what Mr. Romer calls "delegated democracy."

“The British raised tens of millions of people out of poverty" in the colonial era, Mr. Romer said. "Hong Kong is the most successful development program in economic history.”

Mr. Romer would not trust the United States to serve as a steward in Africa, and he even doesn't think even the European Union is up for the task.

Mr. Romer has discussed his idea, which might strike some as radical, in small circles for some time, and now he'd like to influence the wider debate on development issues, such as the effectiveness of development aid. He does not believe in the philosophy of many non-governmental organizations (NGOs) that national governments are best avoided altogether in favor of directly reaching needy Africans. Good governance requires more discipline and a guarantee that the party in power does not abuse its power.

“When I talked to people in Singapore they said: 'We can build a new city,'" Mr. Romer said. "They have done that in Suzhou. They said ´we know how to do this, lets put some wise men in charge´. My response is how we can trust them? How do we hold them responsible?”

In one scenario, these new trustee areas would be run by multinational corporations, with the security taken care of by private armies. Instead, he is looking at Scandinavia.

“I would trust Norway to run these new city states all over the world," said Mr. Romer. "They don’t have to run the army; they just have to say what the army should do."

Mr. Romer's ideas seem likely to generate discussion, and he promises to continue to refine them in the months and years ahead.