Economics 3366A/B Study Guide - Quiz Guide: Centralisation, Four Freedoms, Homo Economicus
8 Oct 2020
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Debate on centralisation versus decentralisation or, as put here, economics of federalism". Lot of literature already emerged in the 90s, particularly in the us. Recently, increase in literature and relevance within european union. Application is empirical matter and depends on interpretation. In 1950s, he wrote article on optimal provision of local public goods". Tiebout was interested in the following problem: a community can create all different kinds of public goods (sports, arts, culture). Local government can provide public goods based on democratic community. E. g. culture fan but mostly sports provided . Some say exiting is also a way of voicing; they call it voting with the feet. You show you are dissatisfied with the supply, which you show by going away. Tiebout: exit strategy is good; you see people are different and have different preferences. As a result, logically, you will see different communities offering different services; trying to offer services which optimise demand/preferences of those living in the community.
