I recently read an interesting article by Spencer McCallum on the friendly site panarchy.ru with the tedious title The Community Enterprise: Market Competition, Land and the Environment. Alexey Korshunov, who posted this article, claims that one of the three private contractual jurisdictions in Honduras, Ciudad Morazán—which he refers to in a Russian style as Morazanograd—operates on the principles described in it, and in which he, as it happened, became the first resident. (By the way, not long ago he crowdfunded a ticket to the most famous Honduran ZEDE called Prospera, traveled there, and subsequently posted a report on the state of affairs in this flagship project)

Briefly, McCallum’s article contains the following ideas. The value of a piece of land can be defined as the sum of external effects directed toward that plot from all other property objects. If the landowner is separated from its immediate use and rents it out to several tenants, they are usually extremely interested in maximizing the rental income, and therefore have market incentives to create the most favorable environment possible for the tenants. For this reason, the author argues, where land is occupied by individual houses or, worse, apartment buildings where the apartments are owned by the residents, each owner maximizes their own living convenience; however, where significant areas are rented out to numerous tenants, a lush variety of ways to use these spaces begins to flourish, from cafes and shops to coworking spaces and laboratories. The task of the administrator of a particular business center essentially boils down to providing utilities to tenants and minimizing friction between tenants and the state. A kind of “protection racket” for the healthy person.

Morazanograd is designed to provide its residents with the maximum possible security for Honduras, acceptable living conditions, and a place to earn money. In creating the Montelibero settlement, we are not entirely following the recommendations laid out in the article: instead of leaving all the land under the ownership of the foundation, developing it centrally, and renting it only to residents, we sliced approximately two-thirds into small private pieces for independent development, while the rest was indeed left for rent. Thus, we should end up with a field experiment to see which concept works better. In any case, we are still at the stage of laying the centralized infrastructure, much like Morazanograd, except that we are not building a fence around the settlement, as Montenegro is not a place where one should fear the neighbors.