The Fractured Metropolis: Optimization Cutoffs, Uneven Congestion, and the Spatial Politics of Globalization

Dong Yang

Papers from arXiv.org

Abstract: The divergence in globalization strategies between the US (retrenchment and polarization) and China (expansion) presents a puzzle that traditional distributional theories fail to fully explain. This paper offers a novel framework by conceptualizing the globalized economy as a "Congestible Club Good," leading to a "Fractured Metropolis." We argue that globalization flows ($M$) are constrained by domestic Institutional Capacity ($K$), which is heterogeneous and historically contingent. We introduce the concept of the "Optimization Cutoff": globalization incentivized the US to bypass costly domestic upgrades in favor of global expansion, leading to the long-term neglect of Public Capacity ($K_{Public}$). This historical path created a deep polarization. "Congested Incumbents," reliant on the stagnant $K_{Public}$, experience globalization as chaos ($MC>MB$), while "Insulated Elites" use Private Capacity ($K_{Private}$) to bypass bottlenecks ($MB>MC$). This divergence paralyzes the consensus needed to restore $K_{Public}$, creating a "Capacity Trap" where protectionism becomes the politically rational, yet economically suboptimal, equilibrium. Empirically, we construct an Institutional Congestion Index using textual analysis (2000-2024), revealing an exponential surge in disorder-related keywords (from 272 hits to 1,333). We triangulate this perception with the material failure of $K_{Public}$, such as the 3.7 million case backlog in US immigration courts. Our findings suggest the crisis of globalization is fundamentally a crisis of uneven institutional capacity and the resulting political paralysis.

Date: 2025-12
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