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Why Local Governments Need to Compete to Offer Citizens What They Want

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Why Local Governments Need to Compete to Offer Citizens What They Want

Governing September 20, 2022
EconomicsOtherEmployment
Urban PolicyOther

For decades, superstar cities could thrive and grow despite high taxes, expensive housing and poor policy choices. The pandemic’s surge in remote work has changed that for good. Governance matters more than ever.

At least when it comes to domestic migration, red states have been the big winners from America’s pandemic: Texas’ and Florida’s gains were California’s and New York’s losses. Given the degree to which states were allowed to set their own COVID-19 policies and how divergent the paths of red and blue America were — from business and school closures to masking and vaccine stances — where we have been choosing to move to seems inextricably linked to policy choices. “Americans are fleeing to places where political views match their own,” declared NPR earlier this year.

The very Americanness of moving to the frontier, of federalism and states as laboratories of democracy would make saying that we “vote with our feet” seem plainly obvious. But it’s not. That phrase was coined in the 1950s by the economist Charles Tiebout, and it’s been contested ever since. Contested not just because Tiebout’s theory seemed inherently political, but because there was another theory with seemingly more explanatory power: “agglomeration economics,” the idea that people and businesses derive major benefits from locating near one another. But in the end, it’s Tiebout having the laugh.

Continue reading the entire piece here at Governing

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Michael Hendrix is the director of state & local policy at the Manhattan Institute.

Photo by Chris Ryan/iStock

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