In this week’s episode of Underthrow Podcast, Gabriel Delgado offers a compelling vision for how innovative governance can unlock human flourishing. As co-founder of Próspera—a special economic zone in Honduras—Gabe represents a rare combination of visionary thinking and practical building, following in the footsteps of his grandfather, Muso, who founded Universidad Francisco Marroquín (UFM) in Guatemala.
What is Próspera?
At its core, Próspera is a reset button for taxes and regulations. Operating under Honduras’s ZEDE framework (Zones for Economic Development and Employment), it’s a special jurisdiction that layers in governance best practices on previously undeveloped land. The genius? Instead of attempting the near-impossible task of deregulating existing systems with entrenched interests, Próspera starts fresh and builds up only what works.
The platform offers entrepreneurs a way to “build faster, cheaper, get to market quicker” by providing governance as a service—treating law itself as a competitive product rather than a static imposition.
Revolutionary Legal Innovations
Próspera introduces several groundbreaking mechanisms:
Regulatory Choice
Companies can select their regulatory framework from the top OECD countries. Want to practice German medicine alongside French pharmaceutical standards? Próspera makes it possible, creating a one-stop shop for global best practices.
Insurance-Based Regulation
Rather than relying on government bureaucrats, Próspera leverages market forces by requiring industry-specific insurance. Insurance companies—with capital at risk—become the de facto regulators, aligning incentives toward actual risk reduction rather than bureaucratic box-checking.
Industry-Proposed Legislation
Operators can propose new regulations for their sectors, which go through a rigorous approval process before becoming law for everyone. This keeps regulations evolving with technology and market realities while preventing cronyism that keeps laws locked in amber.
The Singapore Model for Latin America
Gabe’s vision extends far beyond Honduras. He sees Próspera as potentially replicating Singapore’s transformative effect on Southeast Asia—becoming so successful that neighboring countries will be compelled to adapt or fall behind. The goal isn’t just creating one prosperous zone, but catalyzing a “constellation of Prósperas” worldwide that demonstrates how governance reform can leapfrog developing countries into the top tier of ease of doing business.
This matters because reform is tough.
As Gabe learned from his grandfather’s failed attempt to reform Guatemala’s constitution, those who benefit from existing systems—even broken ones—resist change. Special zones offer an alternative path characterized by voluntary participation, competitive pressure, and demonstrated results.
Dangerous Opposition
The journey hasn’t been easy. Despite bringing investment and jobs to one of Honduras’s poorest communities, Próspera has faced opposition from business elites fearing competition, politicians worried about power, and a hostile national government in the capital. The current administration has withheld critical services, generated hostile rhetoric that has deterred investors, and raised genuine physical security concerns for the team.
Yet Próspera survived through unwavering commitment to a vision of human flourishing through freedom and voluntary cooperation. The team developed expertise in “statecraft”—building relationships with stakeholders, countering misinformation, and demonstrating value on the ground. Local residents who initially viewed the project with suspicion became its advocates as jobs and opportunities materialized.
Why This Matters Beyond Honduras
Próspera’s model addresses problems plaguing wealthy countries, as well. The United States struggles to reshore manufacturing amid regulatory thickets. Europe faces economic stagnation. Even successful reform efforts, such as those in Argentina, encounter walls of entrenched interests.
Regulatory sandboxes—whether in developing nations or established democracies—offer a way forward. They allow experimentation, demonstrate what works, and create competitive pressure for improvement without requiring wholesale political revolution. They’re the Hanseatic League reimagined for the 21st century: small, nimble jurisdictions that can compete and innovate rapidly.
The Path Forward
With over 325 businesses established and banking access now solved, Próspera is poised for “hypersonic” growth. The digital-first approach means anyone worldwide can create legal entities and begin transacting without physical presence in the zone.
More importantly, Próspera demonstrates that Bob Heywood’s quiet work in lifting millions out of poverty through institutional reform can be replicated. Governance innovation—not just technological innovation—remains humanity’s most powerful lever for progress. The future doesn’t require imposing “one true way” on everyone, but instead allows voluntary experimentation and competitive discovery of what works.
As Gabe reflects on moments when Divine Providence seemed to intervene, saving the project from existential threats, one senses this is more than entrepreneurship—it’s becoming a movement. A movement returning to principles that generated unprecedented prosperity: freedom, responsibility, voluntary cooperation, and the recognition that the best solutions emerge from experimentation rather than central planning.
Whether Próspera becomes the Singapore of Central America remains to be seen. But the vision it represents—that governance can and should serve rather than dominate human flourishing—may prove as revolutionary as any technology emerging from Silicon Valley.
