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Tiebout model

  An argument for a large number of competing local government units in an area, offering a range of \'service-taxation packages\'. According to Tiebout (1956), large local governments are inefficient because they cannot react to the great diversity of demand for locally provided public services (see public goods) and the willingness to pay for them. Fragmentation of local government is thus more efficient (especially within an urban area) because each unit can tailor its service provision and tax requirements to meet a particular set of demands and consumers (householders and/or other land users) can choose to locate in that unit which is closest to their preferences. Consumer mobility will ensure that provision and preferences are matched (see fiscal migration), and a local government unit that fails to attract residents will have to change its service-tax package to ensure viability .

Tiebout\'s model provides a theoretical justification for local government and underpins aspects of the \'consumer sovereignty\' arguments promoted strongly during the 1980s by the \'New Right\'. It is based on strong assumptions regarding consumer information and mobility, however, and its validity as a guide to policy has been questioned by those who point to the constraints on mobility which many people suffer. To them the fragmented local government system in most US metropolitan areas is seen not as a paradigm example of the model in action but rather as a device for the affluent and powerful in society to create \'tax havens\' from which, through exclusionary zoning practices, those less well-off than themselves are excluded. (RJJ)

Reference Tiebout, C.M. (1956) A pure theory of local expenditures. Journal of Political Economy 64: 416-24.

Suggested Reading Johns ton, R.J. 1984: Residential segregation, the state and constitutional conflict in American urban areas. London and New York: Academic Press. Whiteman, J. 1983: Deconstructing the Tiebout hypothesis. Environment and Planning D: Society and Space 1: 339-54. Zodrow, G.R ., ed., 1983: Local provision of public services: the Tiebout model after twenty-five years. New York and London: Academic Press.



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