Idea
If people can move freely between many local jurisdictions offering different packages of taxes and services, they will 'vote with their feet', and local public goods will be provided efficiently.
Theory
Charles Tiebout (1956) answered Samuelson's argument that public goods cannot be priced like private goods. The model assumes mobility, full information and no spillovers between jurisdictions.
Real examples
- Residential sorting across US suburbs and school districts.
- Competitive-governance arguments for charter cities and network states.
Critique
The assumptions rarely hold: moving is costly, information is imperfect and sorting can deepen segregation by income and race.
Results
Evidence of sorting and of tax-and-service differences being priced into housing exists; the efficiency claim remains a theory.
Related
Claims
Tiebout argued that if people can move freely among many local jurisdictions, they will sort according to their preferred bundles of taxes and public goods.[1]
Revision history
- 2026-10-23rev 2 — Seed import
- 2026-10-23rev 1 — Seed import