APureTheoryOfLocalExpenditures课件.pptVIP

A Pure Theory Of Local Expenditures Charles M. Tiebout 1956 JPE presented by Haijun Ou * Introduction（1/2） Musgrave and Samuelson: No market type solution to determine the level of expenditures on public goods. A rather large portion of national income allocated in a non-optimal way when compared with the private sector. Government adopts to consumers preferences. The rational consumers will understate……. The current method ……political mechanism, ability-to-pay principle. Musgrave and Samuelson assume that expenditures are handled at the central government level. * Introduction（2/2） In actual, it is not like this. Local VS central…… Whether at the local level of government any mechanism operates to insure that expenditures on these public goods approximate the proper level? Consumer-voters vote by feet to ensure the efficiency of local public goods. Pure public goods VS local public goods? * Model(1/4) Assumptions1: Consumer-voters are fully mobile and will move to community where their preferences are best satisfied. (heterogeneous) Assumptions2: …have full knowledge of differences among… Assumptions3: …a large number of communities… differ in provision of local public goods (competition) Assumptions4：Restrictions due to employment opportunities are not considered. All persons are living on dividend income. * Model(2/4) Assumptions5: The public services supplied exhibit no external economies or diseconomies between communities. Assumptions6: The optimum community size(the lowest average cost) exit…some factor is fixed. (competition) Assumptions7: Communities below the optimum size seek to attract new residents to lower average costs. Those above optimum size do just the opposite. * Model(3/4) Vote by Feet to ensure the efficiency of provision…local public goods. Moving (or not) reveal the real preferences of consumer-voters on local public goods. * Model(4/4) Policy Implications1: municipal integration is justified only if more of any se