The Distance between Buchanan's 'An Economic Theory of Clubs' and Tiebout's 'A Pure Theory of Local Public Expenditures'. New Insights Based on an Unpublished Manuscript

33 Pages Posted: 9 Feb 2016 Last revised: 10 Apr 2016

See all articles by Peter J. Boettke

Peter J. Boettke

George Mason University - Department of Economics

Alain Marciano

Université de Montpellier; Université Montpellier I - Montpellier Recherche en Economie (Montpellier Research in Economics) MRE

Date Written: December 15, 2015

Abstract

This article introduces Buchanan's comment on Tiebout's "A Pure Theory of Local Public Expenditures". It helps us to understand the nature of the relationship between Buchanan and Tiebout. Usually, it is claimed that Buchanan modeled Tiebout's insights, that there exists a Buchanan-Tiebout hypothesis, and that Buchanan in 1965 complemented what Tiebout had written in 1956. We show that Buchanan could not have written "An Economic Theory of Clubs" as a complement of "A Pure Theory of Local Public Expenditures". He disagreed with Tiebout's ideas on mobility because he saw mobility as a cause of inefficiencies and not a cause of homogeneity in groups. This is what we show by putting Buchanan's comment on Tiebout into historical perspective. It appears that Buchanan interpreted Tiebout (1956) from the perspective of his works on fiscal federalism from the early 1950s. We show that there is a continuity between Buchanan (1950) and his works in the early 1970s; and Buchanan's way of reading Tiebout is part of it. Hence, when he wrote "An Economic Theory of Clubs", Buchanan was convinced that Tiebout was wrong and that he was offering an alternative framework for public economics.

Keywords: Buchanan, Tiebout, Clubs, Fiscal federalism, Fiscal justice, spatial competition, free riding

JEL Classification: B31, H41, H73, H77

Suggested Citation

Boettke, Peter J. and Marciano, Alain, The Distance between Buchanan's 'An Economic Theory of Clubs' and Tiebout's 'A Pure Theory of Local Public Expenditures'. New Insights Based on an Unpublished Manuscript (December 15, 2015). GMU Working Paper in Economics No. 16-10. Available at SSRN: https://ssrn.com/abstract=2729670 or http://dx.doi.org/10.2139/ssrn.2729670

Peter J. Boettke

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States
703-993-1149 (Phone)
703-993-1133 (Fax)

Alain Marciano (Contact Author)

Université de Montpellier ( email )

Avenue Raymond Dugrand, CS 79606
Montpellier Cedex 1, F-34000
France

Université Montpellier I - Montpellier Recherche en Economie (Montpellier Research in Economics) MRE ( email )

Montpellier
France

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