Local Government Fiscal Structure and Metropolitan Consolidation

Abstract

when the focus is limited to municipalities, as it is in this paper, the number is impressive. There were 19,372 municipalities in the United States in 1997.1 Most large metropolitan areas in the United States are divided into a hundred or more distinct municipalities. Even metropolitan areas of moderate size typically have fifty or more distinct municipalities. For much of the twentieth century, there appears to have been a relatively broad consensus reaching across disciplines that this multiplicity of local gov-ernments was undesirable—a manifestation of disorganization and a prescription for inefficiency in the provision of public services.2 This con-sensus spawned a metropolitan government movement that met with little success and much resistance. At about the same time the political movement for metropolitan government was beginning to run out of steam, the intellec-tual underpinnings also came under challenge––thanks largely to the work of Tiebout, and Ostrom, Tiebout, and Warren.3 The trade-offs between the ben-efits of decentralized choice and the potential gains from coordination have