Two new paths to drive political innovation
Competition and new frontiers are the main drivers for innovation.
Every year, hundreds of innovative companies come into existence solely because we can create new economic entities from scratch. We have blank slates to experiment with and try new technologies, processes, and business models. However, why don’t we observe such innovations in Government-related Institutions like Law, Regulations, Media, Public Transportation, and Health?
The reason lies in the very nature of the industry.
Governments are closed and monopolistic systems. They face significant barriers to entry. It’s nearly impossible to start a new country. Even if you are a high-level politician, implementing a simple change depends on convincing hundreds of people or enacting sweeping laws, which is extremely difficult and often ineffective.
Without experimentation, trial and error, and clean slates, there can be no innovation.
Nevertheless, in the past decade, this situation has been rapidly changing, driven by two major new frontiers: the Internet and Charter Cities.
Charter cities are semi-autonomous regions established by a country, granted special jurisdiction and distinct laws, such as commercial, regulatory, tax, and property rights laws. The model aims to foster governance innovation and attract capital to accelerate social development and economic growth on a small scale. Some examples are Próspera in Honduras, Shenzhen in China, and DIFC in Dubai.
While undeniably powerful, this approach is still slow and dependent on technologically progressive governments. Rolling these initiatives out requires substantial energy and time for convincing and reforming. For instance, it took +5 years just for Próspera to establish the necessary new laws to initiate the project.
On the other hand, the Internet represents a completely new paradigm of innovation. It’s a genuinely uncharted frontier. It has enabled numerous successful experiments within Institutions, such as Media (Social Media), Education (MOOCs), and Currency (Cryptocurrencies). Moreover, in recent years, it has unlocked the rise of new types of communities, cities, and even countries, often referred to as Startup Societies.
These startups emerge as online collectives of like-minded individuals collaborating to drive innovation in specific aspects of the existing civic framework, such as Health Regulation, Public Architecture, and Governance.
Patri Friedman, a pioneer in governance competition, coined these initiatives as Sovereign Communities. They encompass a wide spectrum, ranging from co-living networks distributed across several pre-existing jurisdictions, such as Cabin City, which focuses on lifestyle innovation, to Network States, which are ambitious projects aiming to establish new diplomatic-recognized sovereign nations, such as Afropolitan and Praxis.
We have now entered an era where political change is no longer solely a function of voice. We have finally reached the technological and cultural point where we can establish new institutions from the ground up.
And, in the coming years, these new startups will demonstrate their best ability: to transform political scarcity into abundance.