The author analyzes the role of competition among governments. Although traditional public finance economists fear that competition among governments may be too strong, endangering revenue generation or leading to destructive outcomes in the Tiebout model, this article argues that competition among governments, properly understood, may promote efficiency, but natural barriers to competition require regulation by democracy.
Get full access to this article
View all access options for this article.
References
1.
Bannock, G., R. E. Baxter, and E. Davis. 1998. The Penguin dictionary of economics. London: Penguin.
2.
Begg, D., et al.1993. Making sense of subsidiarity: How muchcentralization for Europe?London: CEPR.
3.
Bewley, T. F.1981. A critique of Tiebout’s theory of local expenditures. Econometrica49:713-740.
4.
Buchanan, J. M., and G. Tullock. 1962. The calculus of consent. Ann Arbor: University of Michigan Press.
5.
Diamond, P. A., and J. A. Mirrlees. 1971a. Optimal taxation and public production I: Production efficiency. American Economic Review61:8-27.
6.
Diamond, P. A., and J. A. Mirrlees. 1971b. Optimal taxation and public production II: Tax rules. American Economic Review61:261-278.
7.
Edgeworth, F. Y. [1897] 1958. The pure theory of taxation. In Classics in the theory of public finance, edited by R. A. Musgrave and A. T. Peacock, 119-136. Reprint, Houndmills, UK: Macmillan.
8.
Hirschman, A. O.1970. Exit, voice and loyalty: Responses to decline in firms, organizations and states. Cambridge, MA: Harvard University Press.
9.
Matsusaka, J. G.1995. Fiscal effects of the voter initiative: Evidence from the last 30 years. Journal of Political Economy103:587-623.
10.
Mill, J. S.1848. Principles of political economy with some of their applications to social philosophy. London: Longmans, Green, and Co.
11.
Pufendorf, Samuel. [1672] 1995. De jure naturae et gentium, libriocto. 2 vols. Reprint, Buffalo, NY: William S. Hein & Co.
12.
Ramsey, F.1927. A contribution to the theory of taxation. Economic Journal37:47-61.
13.
Reiter, M., and A. Weichenrieder. 1997. Are public goods public? A critical survey of the demand estimates for local services. Finanzarchiv54:374-408.
14.
Sinn, H. W.1997. The selection principle and market failure in systems competition. Journal of Public Economics66:247-274.
15.
Tiebout, Ch. M.1956. A pure theory of local expenditures. Journal of Political Economy64:416-424.
16.
Wicksell, K. 1896. Finanztheoretische Untersuchungen nebst Darstellung und Kritik des Steuerwesens Schwedens. Jena: Gustav Fischer.
17.
Zodrow, G. R., and P. Mieszkowski. 1986. Pigou, Tiebout, property taxation and the under provision of local public goods. Journal of Urban Economics19:356-370.
