The Detroit Discontinuity

R. Warren Anderson ()
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R. Warren Anderson: University of Michigan-Dearborn

Homo Oeconomicus: Journal of Behavioral and Institutional Economics, 2018, vol. 35, issue 3, No 2, 167-184

Abstract: Abstract The popular refrain for Detroit’s economic downfall is the collapse of the auto industry. This is unsatisfactory as the manufacturing decline affected the entire Detroit metro region but all of Detroit suburbs have not suffered the same fate as the city. This article offers a different yet more complete argument for Detroit’s poor performance by analyzing the politics of the city along various dimensions. Detroit differs from its neighbors by having more corrupt and destructive politics accompanied with high tax rates. Tiebout competition allows for Detroit residents to leave its poor yet expensive governance. While the decrease of auto-manufacturing jobs clearly negatively impacted the city, poor governance set Detroit apart from nearby areas and better describes its long run condition.

Keywords: Taxes; Detroit; Corruption (search for similar items in EconPapers)
JEL-codes: D73 H13 H71 (search for similar items in EconPapers)
Date: 2018
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DOI: 10.1007/s41412-018-0073-8

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