Tiebout Hypothesis

The Tiebout Hypothesis suggests that communities or local governments compete to attract residents by offering different public goods and services, like schools, parks, or taxes. People "vote with their feet" by choosing the community that best fits their preferences. As a result, this competition encourages local governments to efficiently tailor their offerings, leading to optimized public services and more satisfaction among residents. Essentially, it posits that a variety of local jurisdictions can lead to better allocation of public resources because residents can choose communities that match their needs and preferences.