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The Community in Terms of an Appropriate Level of Public Goods and Services - Research Paper Example

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The paper describes the Tiebout hypothesis that puts forth a set of assumptions - namely, access to complete information, free consumer mobility, many buyers and sellers, and consumer rationality. Tiebout also added the assumption that an optimal city size exists…
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The Community in Terms of an Appropriate Level of Public Goods and Services
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Download file to see previous pages The hypothesis has been used to provide insights in public finance about the choices of communities for public goods (e.g., sanitation, education, public security) and how property values correlate with taxes and services that are provided. Zoning laws and regulations have also been explained by using the model. Above all, the hypothesis has had an impact on debates and decision making concerning fiscal federalism and the proper roles of central, regional, and local governments. (ibid.). The case of a bill passed in June 2009 by the New York Senate which was aimed to ease government consolidation, may be used to illustrate the last point. The law simplifies the complex array of laws specifying "how government officials can choose to dissolve or merge towns, villages and the hundreds of special districts that provide water, sewage treatment and other services throughout the state." The statute does not propose consolidation as such but only creates a simple, uniform process by which voters and officials can decide on and execute consolidation, requiring only that 10 per cent of registered voters propose it. It will allow county governments to abolish local government units by a majority. On the pro side, the argument is that too many layers of government have burdened residents with the highest taxes in the country, driving out people and businesses. Also, by consolidating local government activities such as tax collection, it could save some $1 billion in taxes. It would also remove patronage politics inherent in the proliferation of local governments. ...Download file to see next pagesRead More
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