The Complex Legal Frameworks where Special Jurisdictions Nest

Abstract

For the last seven years within the Startup Societies movement, there has been a surge in entrepreneurs, developers, and online communities, including Network States, that intend to create autonomous special jurisdictions. However, understanding how to create a jurisdiction, especially an autonomous one, is very different from wanting to create one. Among Startup Society types, Special Economic Zones (SEZs) are one of the models private developers seek the most. SEZs enjoy autonomy, and their jurisdictional arbitrage has led to significant economic and social transformations in some parts of the world. But getting there is hard. Zones are not created in institutional and legal isolation. This paper shows the institutional and legal frameworks Startup Society entrepreneurs need to navigate and untangle to create new jurisdictions. To achieve this, the paper uses the complex governance concept of “nestedness.” I argue that establishing a new jurisdiction necessarily entails dealing with existing, nested complex governance structures–both regulatory and institutional–which is inherently difficult. I use complexity to show why and how. The findings are extracted from research I conducted between 2017 and 2019 on an attempted Maritime Special Economic Zone (SeaZone) called the Floating Island Project in French Polynesia, based on ethnographic research methods, namely participatory observation and document analysis. This paper synthesizes multiple nested regulatory frameworks concerning immigration, real estate, taxes, blockchain, and infrastructure. These were all aspects that the SeaZone founders needed to untangle to create a globally competitive framework. This paper makes a significant contribution to the field of special jurisdictions by highlighting the challenges and complexities involved in establishing Zones characterized by autonomous governance, legal, physical, and digital extraterritoriality. It highlights the importance of approaching Zone and Startup Society creation with a practical mindset.