LOCAL ZONING LAWS
Why? The positive case is that, over time, laws are least bad and oppressive when they are closest to the people. In these conditions, we are more likely to experience government by the people. If that is not the case, smaller units of government permit people to move from one jurisdiction to another, and the competition between units drives the whole system towards greater liberalization. Capital and labor flow to areas that permit more liberty, even as despotic jurisdictions drive away new wealth and talent.I recall a few bloggers running their lips about how Wal-Mart's strategy is to set-up on the edge of towns to drive business away from traditional downtown establishments. Well I can't speak to Wal-Mart's strategy, but I can tell you for certain that cities in California want retail commercial development on the edge of town in hopes of enticing consumers from neighboring cities to stroll across municipal lines and drive up taxable sales. If the sale is made there, a trickle of the tax revenue returns there from the State of California . . . eventually. Notice this revenue stream has NOTHING to do with municipal service demands. You see, even if we were to take government provision of public goods seriously, we would still have to conclude that local government is a miserable, miserable failure. International Phone Cards
We see this in local governments all the time. Neighboring towns frequently compete with each other on the rules by which the residents live. It can be a small matter of the local sales tax which can cause a business to locate on this instead of that side of the tax jurisdiction. Zoning laws can drive companies and developers from one town to another.