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Why would you choose a country to be the custodian of a city state instead of choosing a city or several cities to act as custodians?

I hardly think that nations are fit to manage a special economic zone.

Hong Kong, Singapore, NYC, San Francisco, etc. are better equipped to manage a special economic zone than England or Switzerland are.

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Countries have military forces that can ensure the settlement of international disputes.

Yeah, but from what I gathered from the article, the discussion going isn't about the custodianship of the entire country (although it's titled to give that idea), but the custodianship of a special economic zone governed according to Romer-istic policies and principles. Nicaragua could still serve as the protectorate of this SEZ.

Yes, Nicaragua would be the protectorate, but the terms of the contract for the economic zone ultimately can only be enforced by someone with a large enough military to impose justice of the last resort -- or at least have the opportunity to do so. Cities can't do that. Legal clout comes from military cloud. Cities have no military clout. Therefore, they have no legal clout, except as provided for by some country.

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