Micah and Erin/Flickr

The controversial plan appears to have reached a dead end.

Over the last year, Paul Romer's ambitious and controversial vision for Charter Cities —  foreign-run economic colonies designed to bring wealth and stability to poor countries — has been moving quickly towards reality in the Honduran jungle. But a rapid series of setbacks may have brought the project to a halt.

Last month, the project's Transparency Commission, an oversight committee featuring Romer and several other prominent economists, was excluded from agreements between the Honduran government and international development companies, prompting fears about corruption. (One of those companies, the Future Cities Development Corporation — slogan: "Creating Humanity's Future" — was founded by Patri Friedman, grandson of Milton, who wrote in 2009 that "democracy is not the answer.")

Later that month, a prominent Honduras human rights lawyer who had filed one of dozens of legal challenges to the "model cities" decree, was murdered, inspiring further speculation.

Last Wednesday, the Honduran Supreme Court ruled that last October's alterations to the Honduran constitution removing national territory from government control were unconstitutional. A branch of the court had come to that conclusion earlier this month, but because the decision (4-1) was not unanimous, the full court convened to vote. It struck down the legislative decree 13 to 2.

President Porfirio Lobo, one the project's biggest supporters, was upset by the decision, insinuating that the court was influenced by external economic and political interests. He encouraged Hondurans to go to the Supreme Court to look for the jobs that the body's ruling had denied them. "I'm sure they're not thinking about the harm they're doing to the Honduran people," he said.

But the Court sided with those who had opposed the cities as neo-colonial and undemocratic. Ramón Custodio, head of the Honduran Human Rights Commission, praised the decision: "Honduras will continue to exist as a country that does not permit the fragmentation of its territory like fabric being sold for scraps."

Top image: Flickr user Micah and Erin

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