How to make the metropolitan area work? Neither big government, nor laissez-faire

Carl Gaigne, Stephane Riou (), Jacques Thisse and ,

No 2013065, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: We study how political boundaries and tax competition among jurisdictions interact with the labor and land markets to determine the economic structure and performance of metropolitan areas. Contrary to general belief, institutional fragmentation and cross-border commuting need not be welfare-decreasing, but the size of the central city matters for welfare. Under tax competition the central business district is too small. Tax competition also prevents public policy enhancing global productivity to produce their full impact. Although our results support the idea of decentralizing the supply of local public services by independent jurisdictions, they also highlight the need of coordinating tax policies.

Keywords: metropolitan area; fiscal competition; local labor markets; suburbanization; administrative boundary; economic boundary (search for similar items in EconPapers)
JEL-codes: H41 H71 R12 (search for similar items in EconPapers)
Date: 2013-12-11
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Related works:
Journal Article: How to make the metropolitan area work? Neither big government, nor laissez-faire (2016)
Working Paper: How to make the metropolitan area work? Neither big government, nor laissez-faire (2016)
Working Paper: How to make the metropolitan area work? Neither big government, nor laissez-faire (2016)
Working Paper: How to make the metropolitan area work? Neither big government, nor laissez-faire (2013)
Working Paper: How to make the metropolitan area work ? Neither big government, nor laissez-faire (2013)
Working Paper: How to make the metropolitan areas work: neither big government nor laissez-faire (2013)
Working Paper: How to make the metropolitan area work ? Neither big government, nor laissez-faire (2013)
Working Paper: How to make the metropolitan areas work: neither big government nor laissez-faire (2013)
Working Paper: How to make the metropolitan area work ? Neither big government, nor laissez-faire (2013)
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