Skip to main content
Log in

Quasimarket failure

  • Published:
Public Choice Aims and scope Submit manuscript

Abstract

The efficiency of “quasimarkets”—decentralized public goods provision subjected to Tiebout competition—is a staple of public choice conventional wisdom. Yet in the 1990s a countermovement called “neoconsolidationism” began to challenge this wisdom. The neoconsolidationists use the logic of government failure to argue that quasimarkets fail and that jurisdictional consolidation is a superior way to supply public goods and services in metropolitan areas. Public choice scholars have largely ignored the neoconsolidationists’ challenge. This paper brings that challenge to public choice scholars’ attention with the hope of encouraging responses. It also offers some thoughts about the directions such responses might take.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Subscribe and save

Springer+ Basic
EUR 32.99 /Month
  • Get 10 units per month
  • Download Article/Chapter or Ebook
  • 1 Unit = 1 Article or 1 Chapter
  • Cancel anytime
Subscribe now

Buy Now

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Similar content being viewed by others

References

  • Aligica, P., & Boettke, P. J. (2009). Challenging institutional analysis of development: the Bloomington school. New York: Routledge.

    Google Scholar 

  • Beito, D. T., Gordon, P., & Tabarrok, A. (Eds.) (2002). The voluntary city: choice, community, and civil society. Ann Arbor: University of Michigan Press.

    Google Scholar 

  • Bish, R. (1971). The political economy of metropolitan areas. Chicago: Markham.

    Google Scholar 

  • Bish, R. (1999). Federalist theory and polycentricity: learning from local governments. In D. P. Racheter & R. E. Wagner (Eds.), Limiting Leviathan (pp. 203–220). Cheltenham: Edward Elgar.

    Google Scholar 

  • Boettke, P. J. (1993). Why Perestroika failed: the politics and economics of socialist transformation. New York: Routledge.

    Book  Google Scholar 

  • Buchanan, J. M. (1965). An economic theory of clubs. Economica, 32(125), 1–14.

    Article  Google Scholar 

  • Buchanan, J. M. (1969). Cost and choice: an inquiry in economic theory. Chicago: University of Chicago Press.

    Google Scholar 

  • Buser, W. D. (2011). The impact of public sector decentralization on income levels across high-income OECD countries: an institutional approach. Public Choice [this issue].

  • Carr, J. B., & Feiock, R. C. (1999). Metropolitan government and economic development. Urban Affairs Review, 34(3), 476–488.

    Article  Google Scholar 

  • Carr, J. B., & Feiock, R. C. (Eds.) (2003). Reshaping the local government landscape: city-county consolidation and its alternatives. Armonk: M. E. Sharpe.

    Google Scholar 

  • DeHoog, R. H., Lowery, D., & Lyons, W. (1990). Citizen satisfaction and local government: a test of individual, jurisdictional, and city specific explanations. Journal of Politics, 52(3), 807–837.

    Article  Google Scholar 

  • Feld, L. P., & Dede, T. (2004). Fiscal federalism and economic growth: cross-country evidence for OECD countries. Mimeo.

  • Feld, L. P., Zimmerman, H., & Doering, T. (2003). Federalism, decentralization, and economic growth. Mimeo.

  • Feld, L. P., Baskaran, T., & Schnellenbach, J. (2008). Fiscal federalism, decentralization and economic growth: a meta-analysis. Paper presented at the 64th Congress of the International Institute of Public Finance. August 22–25, 2008, Maastricht, The Netherlands.

  • Foldvary, F. (1994). Public goods and private communities: the market provision of social services. Cheltenham: Edward Elgar.

    Google Scholar 

  • Hill, E. W., Wolman, H. L., & Ford, C. C. III (1995). Can suburbs survive without their cities: examining the suburban dependence hypothesis. Urban Affairs Review, 31(2), 147–174.

    Article  Google Scholar 

  • Hill, R. C. (1974). Separate and unequal: governmental inequality in the metropolis. American Political Science Review, 68(4), 1557–1568.

    Article  Google Scholar 

  • Holcombe, R. G., & Williams, D. W. (2011). The cartelization of local governments. Public Choice [this issue]. doi:10.1007/s11127-011-9825-8

  • Leeson, P. T. (2011). Government, clubs, and constitutions. Journal of Economic Behavior and Organization, forthcoming.

  • Lowery, D. (1998). Consumer sovereignty and quasi-market failure. Journal of Public Administration Research and Theory, 8(2), 137–172.

    Google Scholar 

  • Lowery, D. (1999). Answering the public choice challenge: a neoprogressive research challenge. Governance: An International Journal of Policy and Administration, 12(1), 29–55.

    Google Scholar 

  • Lowery, D. (2000). A transaction costs model of metropolitan governance: allocation vs. redistribution in urban America. Journal of Public Administration Research and Theory, 10(1), 49–78.

    Google Scholar 

  • Lowery, D. (2001). Metropolitan governance structures from a neoprogressive perspective. Swiss Political Science Review, 7(3), 130–136.

    Google Scholar 

  • Lyons, W. E., & Lowery, D. (1989). Governmental fragmentation versus consolidation: five public choice myths about creating informed, involved, and happy citizens. Public Administration Review, 49(6), 533–543.

    Article  Google Scholar 

  • McGinnis, M. D. (1999). Introduction. In M. D. McGinnis (Ed.), Polycentricity and local public economies (pp. 1–27). Ann Arbor: University of Michigan Press.

    Google Scholar 

  • Neiman, M. (1976). Social stratification and government inequality. American Political Science Review, 70(1), 149–180.

    Google Scholar 

  • Nelson, R. H. (2005). Private neighborhoods and the transformation of local government. Washington: Urban Institute Press.

    Google Scholar 

  • Nutter, G. W. (1983). Political economy and freedom. Indianapolis: Liberty Fund.

    Google Scholar 

  • Oates, W. E. (1972). Fiscal federalism. New York: Harcourt Brace Jovanovich.

    Google Scholar 

  • Oliver, J. E. (2001). Democracy in suburbia. Princeton: Princeton University Press.

    Google Scholar 

  • Ostrom, E. (1972 [1999]). Metropolitan reforms: propositions derived from two traditions. In M. D. McGinnis (Ed.), Polycentricity and local public economies (pp. 139–160). Ann Arbor: University of Michigan Press.

    Google Scholar 

  • Ostrom, E. (1983a). A public choice approach to metropolitan institutions: structures, incentives and performance. Social Science Journal, 20(3), 79–96.

    Google Scholar 

  • Ostrom, E. (1983b). The social stratification-government inequality thesis explored. Urban Affairs Quarterly, 19(1), 91–112.

    Article  Google Scholar 

  • Ostrom, E., & Parks, R. B. (1999). Neither Gargantua nor the land of lilliputs. In M. D. McGinnis (Ed.), Polycentricity and local public economies (pp. 284–305). Ann Arbor: University of Michigan Press.

    Google Scholar 

  • Ostrom, V. (1972 [1999]). Polycentricity (part 1). In M. D. McGinnis (Ed.), Polycentricity and local public economies (pp. 52–74). Ann Arbor: University of Michigan Press.

    Google Scholar 

  • Ostrom, V. (1973 [2008]). The intellectual crisis in American public administration. Tuscalosa: University of Alabama Press.

  • Ostrom, V., Tiebout, C. M., & Warren, R. (1961). The organization of government in metropolitan areas: a theoretical inquiry. American Political Science Review, 55(4), 831–842.

    Article  Google Scholar 

  • Parks, R. B., & Oakterson, R. J. (1989). Metropolitan organization and governance: a local political economy approach. Urban Affairs Quarterly, 25(1), 18–29.

    Article  Google Scholar 

  • Parks, R. B., & Oakterson, R. J. (2000). Regionalism, localism and metropolitan governance: suggestions from the research program on local public economics. State and Local Government Review, 32(3), 169–179.

    Article  Google Scholar 

  • Rowley, C. K. (1997). Donald Wittman’s the myth of democratic failure. Public Choice, 92(1–2), 15–26.

    Article  Google Scholar 

  • Schneider, M. (1986). Fragmentation and the growth of local government. Public Choice, 48(3), 255–263.

    Article  Google Scholar 

  • Schneider, M. (1989). Intermunicipal competition, budget-maximizing bureaucrats, and the level of suburban competition. American Journal of Political Science, 33(2), 612–628.

    Article  Google Scholar 

  • Schneider, M., & Teske, P. (1993). The progrowth entrepreneur in local government. Urban Affairs Quarterly, 29(2), 316–327.

    Article  Google Scholar 

  • Schneider, M., Teske, P., & Mintrom, M. (1995). Public entrepreneurs: agents for change in American government. Princeton: Princeton University Press.

    Google Scholar 

  • Stigler, G. J. (1962). The tenable range of functions of local government. In E. Phelps (Ed.), Private wants and public needs. New York: W. W. Norton.

    Google Scholar 

  • Teske, P., Schneider, M., Mintrom, M., & Best, S. (1993). Establishing the micro foundations of a macro theory: information, movers, and the competitive local market for public goods. American Political Science Review, 87(3), 702–713.

    Article  Google Scholar 

  • Tiebout, C. M. (1956). A pure theory of local expenditures. Journal of Political Economy, 64(5), 416–424.

    Article  Google Scholar 

  • Wagner, R. E. (2007). Fiscal sociology and the theory of public finance. Cheltenham: Edward Elgar.

    Google Scholar 

  • Wilson, W. (1885 [1956]). Congressional government: a study of American politics. New York: Meridan Books.

    Google Scholar 

  • Wittman, D. (1989). Why democracies produce efficient results. Journal of Political Economy, 97(6), 1395–1424.

    Article  Google Scholar 

  • Wittman, D. (1995). The myth of democratic failure: why political institutions are efficient. Chicago: University of Chicago Press.

    Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Peter T. Leeson.

Additional information

This paper was prepared for a conference on State and Local Public Choice at the DeVoe L. Moore Center at Florida State University, February 17–19, 2011. We thank the Editor and participants of that conference, especially Randall Holcombe, and Richard Wagner, for discussions about the early ideas that formed this paper.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Boettke, P.J., Coyne, C.J. & Leeson, P.T. Quasimarket failure. Public Choice 149, 209 (2011). https://doi.org/10.1007/s11127-011-9833-8

Download citation

  • Received:

  • Accepted:

  • Published:

  • DOI: https://doi.org/10.1007/s11127-011-9833-8

Keywords

Navigation