Metropolitan Governance Structure and Income Growth

Abstract

There has long been debate on the extent to which the structure of government in metropolitan areas helps or hinders income growth. Polycentrists contend that numerous local governments lead to competition that streamlines government, produces services at least cost, and leads to higher incomes. Centristts argue that large, multiple service governments have scale economies leading to more efficient production of services and hence higher incomes. What matters to regionalists is whether there is a metropolitan governance arrangement that effects an improvement in the distribution of economic activity that increases income. Which school of thought is right? This article evaluates the association between metropolitan governance structures and growth in per capita personal income among <287 of the largest metropolitan statistical areas for the period 1976 to 1996. After controlling for several factors, we find empirical support for the centrist and regionalist schools of thought but very little support for the polycentrist school.