A competitive model of local government organization: Implications for the process of community formation within metropolitan regions

This paper has been primarily concerned with the impact of alternative governmental structures on public sector efficiency within an urban region. In order to identify some of the implications of economies of scale in production and consumption of public goods, the presence of interjurisdictional externalities, congestion costs in public good consumption, and constraints in housing markets and the way in which these factors are influenced by varying degrees of jurisdictional consolidation, many limiting assumptions have been introduced. Factors such as interjurisdictional differentials in affluence, radical prejudice, suboptimization and externalities exert strong influences on the organizational structures that emerge in existing urban areas. Furthermore, the emergence of new factors (e.g., energy problems, transportation system options, institutional constraints imposed by the interaction of localities with federally funded programs) will no doubt affect the opportunity costs of alternative governmental structures and patterns of community formation. Further research concerning the impact of these additional forces and their relationship to the factors analyzed in the paper would be useful. Copyright Center for Study of Public Choice Virginia Polytechnic Institute and State University 1977