Ciudad Morazán: the future of libertarian power

What is Ciudad Morazán?

Ciudad Morazán is a private city located in a "Zones for Employment and Economic Development (ZEDES)" in Honduras.

Where is Ciudad Morazán?

Ciudad Morazán is located near the city of Choloma, Honduras (220 K residents), on the outskirts of San Pedro Sula (1.4 million).

Why should libertarians care about Ciudad Morazán?

Libertarians face a fundamental disadvantage when running for office against authoritarians.

When an authoritarian wins office, they typically gain money and power. They then use that money and power to reward their supporters, and punish their enemies. Many dictators have become billionaires as a result of seizing control of the government. Many US Congress members have become millionaires while in office.

Authoritarians therefore have strong selfish incentives to run for office and stay in office.

Libertarians, by contrast, will try to reduce the size and scope of government as much as possible (assuming they’re sincere libertarians).

Therefore, libertarians don't personally gain as much by winning office.

Libertarians also have less to offer their supporters: handouts for voters, patronage jobs for campaign volunteers, or protectionist regulations for crony corporations.

At best they can offer tax and regulatory relief, which benefits everyone greatly, but doesn't benefit the libertarian politicians very much personally.

Privately owned cities like Ciudad Morazán change that calculus.

All of the real estate in Ciudad Morazán is wholly owned by a single company (most of which is owned by Morazán founder Massimo Mazzone). All residents (individuals and corporations alike) are renters.

Therefore, all the costs (time, money, risk) that Mazzone spends on infrastructure, negotating with the federal government, and providing public goods (security, water, power) can be recouped later from the rents he charges to the residents.

If Mazzone manages the city well, there will be greater demand to live there, and he can charge higher rents. If he doesn’t, he will lose renters and eventually go out of business.

This is called the entrecom ("Entrepreneurial Community") model of governance.

Under the entrecom model of governance, instead of losing money, libertarians can gain money and power by entering the business of governance.

Who are the residents of Ciudad Morazán?

Almost all of the current residents are Honduran. Most of them work in the nearby industrial city of Choloma.

Who is the founder of Ciudad Morazán?

Massimo Mazzone. Mazzone is an Italian businessman who is married to a Honduran woman, and has lived in Honduras for 20+ years. He initially had a successful career in the pharmaceuticals industry before founding Ciudad Morazán, his passion project.

How does Morazán differ from a gated community?

Morazán has broad autonomy over civil regulations.
Morazán has taxing authority.
Most gated communities operate under homeowner associations (HOAs), where individual homeowners own their properties while the HOA collectively manages common areas, roads, and amenities.
In Morazán, by contrast, all of real estate within Morazán is owned by a single company.

How does Morazán differ from Próspera, another private city within Honduras?

Morazán is intends to be profitable by catering to blue collar local Hondurans. Próspera markets itself to wealthy westerners.
Morazán is located on the mainland, near the industrial city of Choloma. Próspera is located on the island of Roatan, which caters mostly to tourists.
Próspera is governed like an HOA made up of a group of private individuals (each with their own separately owned home).
Morazán is more like a shopping center owned by a single company that rents out to multiple companies.

How does the entrecom model of governance help to reduce crime?

Unlike other cities, which must accept anyone who wants to live or do business there, including criminals, Morazán selects the residents through an application and vetting process. The tenants must contractually agree to Morazán’s regulations when they apply to become a residents.

All of the residents begin with month-to-month leases. If they commit any crimes or behave obnoxiously (play loud music late at night, etc.), their lease is not renewed.

How does the entrecom model of governance help to produce public goods efficiently?

In a traditional city, if someone wants to build a new office building, it often takes years of effort to negotiate permission from the city to do so due to zoning regulations. Neighbors often try to stymie new construction because they expect to endure new costs (crowded streets, more noise, etc) without much of the benefit (rent from the new building).

City government's often delay building or maintaining public works (power plants, roads, etc) because while everyone would benefit, no one wants to pay higher taxes.

By contrast, Mazzone is incentivized to invest in infrastructure because he can expect to earn back his investment from rental fees in the future.

If Mazzone wants to turn an apartment building into an office center, he simply doesn't renew the tenant's lease. No zoning fight at all.

How does the entrecom model benefit residents?

Unlike a traditional city, Mazzone can't unilaterally raise rents/taxes whenever he wants. He must wait until the rental contract ends.

Same goes for new regulations. Mazzone can't impose new regulations until the current contract ends.

If the city fails to provide the promised amenities or fails to maintain quality standards (too much trash/graffiti/crime), residents can force Morazán into binding third party arbitration.

How high is the crime rate in Choloma?

Choloma has one of the highest crime rates in the world. (DAI, 2025). Unlike Choloma, Morazán is surrounded by a high fence and protected by a private police force. Therefore, it's safe enough for children to walk to school and for women to travel alone at night.

How does Morazán make money?

Ciudad Morazán makes money in two ways:

A 5% territorial income tax for both individuals and corporations. Mazzone didn't want a tax at all (he wanted to pay for all public goods out of rental income), but 5% is the lowest tax the government of Honduras would allow. 12% of the tax is passed on to regional and federal government; the remainder is kept to pay for city services. This is the only tax Ciudad Morazán residents pay.
Rental fees for buildings on the land. When it is completed, Ciudad Morazán will house around 15,000 people on 24 hectares (59 acres). It will have a mix of industrial, office, residential buildings. They currently have two bedroom 650 ft2 (60 m2) townhouses available for rent, at $150/month.