India’s Voluntary City — Marginal Revolution

Fascinating piece in the NYTimes about a new city in India, a new city of 1.5 million people and more or less no city government.

Gurgaon was widely regarded as an economic wasteland. In 1979, the state of Haryana created Gurgaon by dividing a longstanding political district on the outskirts of New Delhi. One half would revolve around the city of Faridabad, which had an active municipal government, direct rail access to the capital, fertile farmland and a strong industrial base. The other half, Gurgaon, had rocky soil, no local government, no railway link and almost no industrial base.

As an economic competition, it seemed an unfair fight. And it has been: Gurgaon has won, easily. Faridabad has struggled to catch India’s modernization wave, while Gurgaon’s disadvantages turned out to be advantages, none more important, initially, than the absence of a districtwide government, which meant less red tape capable of choking development.

Gurgaon  has no publicly provided “functioning citywide sewer or drainage system; reliable electricity or water; public sidewalks, adequate parking, decent roads or any citywide system of public transportation.” Yet Gurgaon is a magnet for “India’s best-educated, English-speaking young professionals,” it has 26 shopping malls, seven golf courses, apartment towers, a sports stadium, five-star hotels and “a futuristic commercial hub called Cyber City [that] houses many of the world’s most respected corporations.” According to one survey, Gurgaon is India’s best city to work and live. So how does Gurgaon thrive? It thrives because in the absence of government the private sector has stepped in to provide transportation, utilities, security and more:

From computerized control rooms, Genpact [a major corporation, AT] employees manage 350 private drivers, who travel roughly 60,000 miles every day transporting 10,000 employees. Employees book daily online reservations and receive e-mail or text message “tickets” for their assigned car. In the parking lot, a large L.E.D. screen is posted with rolling lists of cars and their assigned passengers.

And the cars are only the beginning. Faced with regular power failures, Genpact has backup diesel generators capable of producing enough electricity to run the complex for five days (or enough electricity for about 2,000 Indian homes). It has a sewage treatment plant and a post office, which uses only private couriers, since the local postal service is understaffed and unreliable. It has a medical clinic, with a private ambulance, and more than 200 private security guards and five vehicles patrolling the region. It has A.T.M.’s, a cellphone kiosk, a cafeteria and a gym.

“It is a fully finished small city,” said Naveen Puri, a Genpact administrator.

…Meanwhile, with Gurgaon’s understaffed police force outmatched by such a rapidly growing population, some law-and-order responsibilities have been delegated to the private sector. Nearly 12,000 private security guards work in Gurgaon, and many are pressed into directing traffic on major streets.

Not everything works well, of course. Gurgaon is describe as a city of “private islands.” Private oases would be a better term. Within the private oases life is good but in between lies a desolate government desert. Not only are services such as roads and utilities poor, the private oases don’t internalize all the externalities so there are problems with common resources such as the water table. It would also be more efficient to have centralized sewage and electricity.

Continue reading here: marginalrevolution.com

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