A free city in Honduras

I’d very much like to see this succeed:

Small government and free-market capitalism are about to get put to the test in Honduras, where the government has agreed to let an investment group build an experimental city with no taxes on income, capital gains or sales. Proponents say the tiny, as-yet unnamed town will become a Central American beacon of job creation and investment, by combining secure property rights with minimal government interference.

My worry is that the success of a project like this is dependent of the confidence that investors have that the government will honor its pledge. It’s not clear that the best place for this is Honduras, where an insane would-be dictator very nearly took power just a few years ago.

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