Abstract
I present a two-region model in which the actions of local governments can cause the agglomeration of population. A local public good is a centripetal force. The centrifugal force is competition among interregionally mobile workers for housing. In the model the supply of the local public good rises in the number of workers in a region. This creates incentives for immigration. Depending on the relative strength of the centrifugal force, full agglomeration of all workers in one region can result even with perfectly identical regions. This creates an incentive for the local governments in each region to provide the public good strategically leading to overprovision and suboptimal agglomeration.
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