How to make the metropolitan area work ? Neither big government, nor laissez-faire

How to make the metropolitan area work ? Neither big government, nor laissez-faire

[SHS:ECO] Humanities and Social Sciences/Economy and finances

metropolitan area

fiscal competition

local labor markets

suburbanization

administrative boundary

economic boundary

We study how political boundaries and fiscal competition interact with the labor and land markets to determine the economic structure and performance of metropolitan areas. Contrary to general belief, institutional fragmentation need not be welfare-decreasing, and commuting from the suburbs to the central city is not wasteful. Thus, the institutional and economic limits of the central city are not the same. With tax competition, the central business district is too small. The dispersion of jobs is increased when suburbanite workers are allowed to consume the public services supplied by the central city. This indicates the need for some metropolitan governance.

Gaigné, Carl

Riou, Stéphane

Thisse, Jacques-François

2013-04-22

ENG

preprint

http://halshs.archives-ouvertes.fr/halshs-00816405

http://halshs.archives-ouvertes.fr/docs/00/81/64/05/PDF/1318.pdf