On the Optimal Structure of Local Governments
论证空间因素在地方公共品最优供给设计中的关键作用，指出地理重叠导致地方政府需采用特定制度结构，并主张由大都市政府通过使用费和地租融资，从而挑战了传统财政联邦主义理论。
The authors show that space matters in designing the optimal provision of local public goods. Geography imposes a particular institutional structure of local governments due to the overlapping of market areas associated with different local public goods. The optimum can be decentralized through local governments that have jurisdiction over market areas of all local public good types. This implies that the appropriate suppliers of local public goods are metropolitan governments which finance them through user charges and land rent. In addition, the authors' approach invalidates the prevailing theory of fiscal federalism, according to which a layer of government should be established for each type of local public good. Copyright 1995 by American Economic Association.