This paper aims at analysing the population size of local jurisdictions with respect to the characteristics of the goods they provide to their citizens. The economic analysis on the size of government units is mainly founded on the classical fiscal federalism literature (Tiebout, 1956; Buchanan, 1965; Olson, 1969; Oates, 1972) and on the more recent stream on the breaking-up of nations (Alesina and Spolaore, 1997; Bolton and Roland, 1997; Spolaore, 2005). We propose a theoretical framework to further develop the analyses accomplished in the mentioned studies. In particular, we build a model that takes into account the possibly different characteristics of local public expenditures, in terms of both the mix of cash and inkind components and the degree of "rivalness" of the goods and services supplied by local governments. We show that these factors may influence the optimal size of local units. Some conclusions about which level of government should perform any specific mix of public functions, in order to maximize individuals' welfare, are also drawn.