Yesterday, I delivered a plenary address to the Public Choice Society in Nashville on “Tiebout Was Wrong, but Why?” Here are the full slides.
Long story short: The still-popular Tiebout model predicts that – due to competition – local government policies will be highly economically efficient. Yet if you actually look a the world, you will see that local governments perform their core functions – education, housing regulation, and law enforcement – very poorly. Furthermore, the Tiebout model strongly predicts the virtual non-existence of local redistribution, but free public education is a massive counter-example.
To grasp what’s really going on, you must first accept that non-profit competition is far inferior to for-profit competition. The “competition” between local governments is like an academic test that doesn’t count for your grade. It’s better than nothing, but anemic compared to a standard exam where students’ futures are on the line. For details, check out the talk.
The Myth of the Rational Voter: Why Democracies Choose Bad Policies - New Edition, – Illustrated (2008)
The greatest obstacle to sound economic policy is not entrenched special interests or rampant lobbying, but the popular misconceptions, irrational beliefs, and personal biases held by ordinary voters. This is economist Bryan Caplan's sobering assessment in this provocative and eye-opening book. Caplan argues that voters continually elect politicians who either share their biases or else pretend to, resulting in bad policies winning again and again by popular demand.
TRANSCRIPT: The Myth of the Rational Voter by Bryan Caplan is worth the read. In case anyone is wondering why we link to Google Books versus Amazon, it's not because we receive monetary compensation for one versus the other. We, at planksip, support Google Books over Amazon simply because our Journalists use a shared copy for commenting. Of course, we have to purchase individual copies for each contributor on any given project or story, but the ability to create a shared Google Doc directly linked to the book, research or citations is extremely valuable.
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