STRUCTURE, CONDUCT, AND PERFORMANCE IN THE LOCAL PUBLIC SECTOR

Abstract

within a Tiebout setting. The potential for This paper provides empirical evidence migration across jurisdictions serves as a of therelationshipbetweenthestructureof disciplining device within local public the local public goods market and the rel- good, markets. In the Leviathan model, it ative size of the local public sector. Market is budget maximization that is discistructure is measured with respect to both plined. As argued by Nelson (1987), dethe degree of fragmentation and an index centralization can effectively discipline of concentration. For a sample of2l8 met- fiscal behavior in alternative, non-Leviropolitan areas, support for the hypothesis athan, public goods models as well. The of a negative relationship between decen- political cost-minimizing model of Hettralization and government size-a hy- t'ch and Winer (1984) and the median pothesis associated with the Leviathan voter models of Brown and Oates (1987) government model-is found. For the sub- and Tumbull and Niho (1986) also sugurban local public sector, increased juris- get a negative relationship between the dictional fragmentation and decreased degree of decentralization of the public concentration are negatively related to the sector and size. The purpose of this paper assess empirical evidence as to the ratio of own-source revenues to suburban is to income. relationship between the structure of the local public goods market and the relative