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Local Government Structure and Urban Residential Location

The large research literature on the Tiebout model has developed with little attention paid to the urban economic structure in which local government functions. This paper attempts to examine the theoretical consequences of local jurisdictions functioning within a conventional monocentric urban model. It also discusses a mathematical formulation of a two-jurisdiction linear city in which the local service level and local property tax rate might be used as strategic variables in a game theory sense. It is concluded that for this to happen, the local service level has to have more than one element, which is intuitively appealing. Some references are developed to current British local government and possible changes.