Tiebout? Or Not Tiebout? The Market Metaphor and America's Devolution Debate

John D. Donahue

Journal of Economic Perspectives, 1997, vol. 11, issue 4, 73-81

Abstract: The market metaphor of intergovernmental choice as a spur to efficiency (formalized by Charles M. Tiebout) is often invoked to support the shift away from Washington and toward the states. But the model translates badly to governments; governmental entry and exit is costly. Public-sector co11usion often serves citizens' interests. Heterogeneous mobility distorts the signals sent by interstate migration. And while Tiebout (and followers) condition efficiency predictions on optimal distribution, the U.S. devolution movement coincides with rising inequality and has gone furthest where distribution matters most. The metaphor is misapplied. Devolution will likely do more to enfeeble government than to improve it.

JEL-codes: H11 H73 H77 (search for similar items in EconPapers)
Date: 1997
Note: DOI: 10.1257/jep.11.4.73
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Citations: View citations in EconPapers (20)

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