About this episode

Timothy Allen speaks with economist Lotta Moberg about the realities and misconceptions surrounding special economic zones.

"There were probably a lot of brown envelopes on the table involved — they said, okay, have this zone then." - Timothy Allen speaks with economist Lotta Moberg. Lotta, author of the leading academic book on special economic zones, joins the podcast to challenge the conventional wisdom around why zones exist, whether they actually work, and what the popular narrative gets wrong. The conversation opens with Lotta's framework: political economy and public choice theory, which assumes policymakers are self-interested humans, not benevolent optimizers. This lens reshapes how we understand why governments create zones — and why many underperform yet continue to receive funding. She pushes back on the "sandbox" narrative around China's early zones, arguing the origin story was messier and more bottom-up than the neat version usually told. Local businessmen near Hong Kong lobbied corrupt local officials to allow trade — and the central government only endorsed the model years later once results were undeniable. Key takeaways include: privately developed zones consistently outperform government-run ones; failing zones often attract more subsidies rather than being shut down; and the…

People in this episode

Host: Timothy Allen

Guest: Lotta Moberg

Topics covered

• special economic zones
• political economy
• public choice theory
• free cities
• Bitcoin
• cannabis investing

Keywords

• special economic zones
• political economy
• public choice theory
• free cities
• Bitcoin
• cannabis investing
• government funding
• local businessmen

Mentioned in this episode

Books & works: leading academic book on special economic zones

Places: China, Hong Kong

More episodes of Free Cities Podcast

• 179 - My Family Owns a Country | Liam Bates · April 24, 2026 · 1h 15m
• 178 - 8 Hard Truths from 25 Years of Investing in Free Cities | Patri Friedman · April 17, 2026 · 1h 20m
• 177 - The Próspera Master Plan | Gabriel Delgado · April 10, 2026 · 1h 15m
• 176 - Why Everything Feels Broken | James Price · April 3, 2026 · 1h 18m
• 175 - The Last Free Place | Oswald Horowitz · March 27, 2026 · 2h 53m
• 174 - The Architecture of Spontaneous Order | Patrik Schumacher · March 20, 2026 · 1h 47m

Explore listener stats, chart rankings, contacts and more on the Free Cities Podcast podcast page.