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Journal Article

Competition Between Local Governments as a Discovery Procedure

Martti Vihanto
Journal of Institutional and Theoretical Economics (JITE) / Zeitschrift für die gesamte Staatswissenschaft
Vol. 148, No. 3 (September 1992), pp. 411-436
Stable URL: http://www.jstor.org/stable/40752898
Page Count: 26
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Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
Competition Between Local Governments as a Discovery Procedure
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Abstract

Economists usually advocate competition between autonomous local governments on the ground that by moving from one jurisdiction to another the consumers of public goods are perhaps able to reveal their tastes better than in elections. In the view of most economists, the competitive process succeeds in revealing tastes only when it produces foreseeable outcomes that are known to be efficient on the basis of the currently available information. This paper explains that competition can also produce hitherto unknown and often quite surprising discoveries which can be called forth only by permitting competition always and irrespective of its expected particular benefits. Ökonomen treten üblicherweise für Konkurrenz zwischen autonomen lokalen Regierungen ein, weil die Möglichkeit, die Gerichtsbarkeit zu wechseln, die Konsumenten besser als eine Wahl in die Lage versetzt, ihre Präferenzen für öffentliche Güter offenzulegen. In den Augen der meisten Ökonomen ist der Konkurrenzmechanismus nur erfolgreich bei der Enthüllung der Präferenzen, wenn vorhersehbare Ergebnisse produziert werden, die auf der Basis der jeweils verfügbaren Informationen als effizient bekannt sind. Dieser Beitrag zeigt, daß Konkurrenz auch bisher unbekannte und überraschende Entdeckungen produzieren kann. Diese Effekte können jedoch nur genutzt werden, wenn Konkurrenz auch dann zugelassen wird, wenn kein konkreter Nutzen davon erwartet wird.

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