Private cities and state capacity

Last summer I took a bus from Honduras to El Salvador. The bus left at 6:00 AM because, I was told, if it left later it would cross the border in the dark and risk being robbed by highway bandits. A few years ago, I took a bus from Lima to Pulcalpa, both in Peru. In the Amazon we stopped and a man in army fatigues with a rifle strung over his shoulder boarded and asked for “donations.”

I bring these stories up to illustrate the importance of state capacity, which can simply be defined as the ability of a state to exercise its power. In the above situations state power would ensure I wouldn’t be robbed or asked for “donations” by men with guns. One tyrant is often better than many. State capacity also means the ability of the state to complete certain tasks, build a road, effectively tax subjects, etc.

The recent Ebola crisis offered a useful perspective on state capacity vs. private city capacity. An 80,000 person rubber plantation run by Firestone successfully stopped Ebola, despite having no prior experience with such diseases. Instead they simply used common sense and extensive googling to figure out how to best respond. The whole article is worth reading if you haven’t already.

Garcia’s team first tried to find a hospital in the capital to care for the woman. “Unfortunately, at that time, there was no facility that could accommodate her,” he says. “So we quickly realized that we had to handle the situation ourselves.”

The case was detected on a Sunday. Garcia and a medical team from the company hospital spent Monday setting up an Ebola ward. Tuesday the woman was placed in isolation.

“None of us had any Ebola experience,” he says. They scoured the Internet for information about how to treat Ebola. They cleared out a building on the hospital grounds and set up an isolation ward. They grabbed a bunch of hazmat suits for dealing with chemical spills at the rubber factory and gave them to the hospital staff. The suits worked just as well for Ebola cases.

The lesson which should be learned is that though institutional change is hard on a whole, institutional subcontracting can work. Trying to better Liberian institutions could take decades for such results. On the other hand, a private city with an interest in the well being of its residents can deal with a deadly epidemic better than most governments. It can probably do other things better too.

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