STRUCTURE, CONDUCT, AND PERFORMANCE IN THE LOCAL PUBLIC SECTOR

Abstract

This paper provides empirical evidence of the relationship between the structure of the local public goods market and the relative size of the local public sector. Market structure is measured with respect to both the degree of fragmentation and an index of concentration. For a sample of 218 metropolitan areas, support for the hypothesis of a negative relationship between decentralization and government size—a hypothesis associated with the Leviathan government model—is found. For the suburban local public sector, increased jurisdictional fragmentation and decreased concentration are negatively related to the ratio of own-source revenues to suburban income.