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

Carl Gaigne, Stephane Riou () and Jacques Thisse

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Abstract: We study how administrative boundaries and tax competition among asymmetric jurisdictions interact with the labor and land markets to determine the economic structure and performance of metropolitan areas. Contrary to general belief, cross-border commuting need not be welfare-decreasing in the presence of agglomeration economies that vary with the distribution of firms within the metropolitan area. Tax competition implies that the central business district is too small and prevents public policy enhancing global productivity to deliver their full impact. Although our results support the idea of decentralizing the provision of local public services by independent jurisdictions, they highlight the need of coordinating tax policies and the importance of the jurisdiction sizes within metropolitan areas.

Keywords: employment; metropolitan area; tax competition; local labor markets; job decentralization; administrative boundary; emploi; decentralisation; zone métropolitaine; marché local du travail; concurrence fiscale; limite administrative (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (8)

Published in Journal of Public Economics, 2016, 134, pp.100-113. ⟨10.1016/j.jpubeco.2015.12.002⟩

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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 (2013)
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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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01512068

DOI: 10.1016/j.jpubeco.2015.12.002

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