Establishing the micro foundations of a macro theory: information, movers, and the competitive local market for public goods.

The Tiebout theory regarding competition in the local market for public goods is considered as important, but controversial. The controversy regarding the supply of public goods is examined, and it is proposed that competitive markets are influenced by informed consumers, as a result of which consumers benefit.

The Tiebout model of competition in the local market for public goods is an important and controversial theory. The current debate revolves around the apparent disparity between macro empirical studies that show greater efficiency in the supply of public goods in polycentric ...

Read the rest of this article with a Free Trial at HighBeam Research.