Executive Summary Dominant corporations like SpaceX are devising new ways to escape democratic accountability through jurisdictional secession. Their recent efforts parallel efforts from previous industrial barons, like George Pullman and Walt Disney, to secure governing independence through different institutional organizations of the historical company town. Rather than constraining these efforts, local government law has facilitated the emergence of the contemporary corporate enclave—while also blocking the remedy that central cities like Chicago had previously wielded against the corporate capture of local politics: municipal annexation. These trends present a serious challenge for efforts by economic progressives to revive local democracy in response to the ongoing backsliding of federal institutions into entrenched oligarchy. This report documents this trend through four case studies: - Disney World’s self-governed district near Orlando - The nationwide bidding war that Amazon instigated during the search for its second headquarters - Wisconsin’s Foxconn deal - Nevada’s proposed innovation zones Synthesizing the academic literature, it finds several economic and democratic harms from these new corporate enclaves, including distortions to competition, higher taxes and worse services, harms to workers, and harms to democracy. It then looks at some of the challenges that local governments have faced and will face if they attempt to better regulate these enclaves. Introduction Earlier this year, 218 residents of Starbase, Texas—almost all employees of Elon Musk’s aerospace transportation company SpaceX or their family members—voted overwhelmingly to incorporate the company’s landholdings into an independent and self-governed jurisdiction.1 The incorporation represented the culmination of a yearslong effort by Musk, first confirmed in a 2021 tweet on the social media platform that he now owns: “Creating the city of Starbase, Texas.”2 Almost immediately after the incorporation vote, the company (operating through its new shell government) consolidated its governing authority over a wide range of local policymaking that affected its