The Local Political Economy of Inner City Neighborhoods: Theory and Application

Abstract

One of the issues in the local political economy literature revolves around the advantages of a centralized system of government versus a decentralized system of metropolitan governance with overlapping jurisdictions. Supporters of the creation of suburban communities within metropolitan areas suggest that a decentralized system creates a quasi-marketplace amongst suburban communities where residents and businesses as a whole benefit from a more attractive bundle of public services. The success of this type of system has traditionally been evaluated based on criteria such as efficiency, equity, and political feasibility. We turn the logic of metropolitan fragmentation/overlapping jurisdictions inward to explore theoretically whether the creation of Community Benefits Districts (CBDs) can similarly achieve efficient service delivery benefits for residents and businesses in inner cities, while also including equity and political feasibility in service provision as additional evaluative criteria. CBDs are new city sub-districts whose residents and businesses both agree to pay an additional property tax in order to receive supplemental public services such as safety, garbage collection, and economic development. We then attempt to apply the concepts of efficiency, equity, and political feasibility to a case study of a Baltimore sub-district.