Charles Tiebout conjectured that “voting with your feet” in a system of local government would produce an efficient supply of local public goods.
A. What are local public goods? How do they differ from pure public goods? (at least 50 words)
B. Discuss three assumptions that must be satisfied in order for the Tieout hypothesis to be correct. (at least 50 words)
C. Suppose that the Tiebout hypothesis fails. What is the role of the federal government in a fiscal federalist system? (at least 50 words)