Do Governments Compete? Should They?
From 1950 to 2013, the population of Detroit declined from 1,850,000 to 700,000 – more than 60%. In the same period, the population of the United States increased from 151.3 million to 316.4 million — more than double. This suggests that some people were doing some things better than some others.
If you are a government official and your sole source of revenue is taxes paid to you by residents, you might want to consider policies that keep those residents from leaving and sending their tax dollars to your competitors.
Had Detroit grown at the same rate as the United States, it might now have 3.7 million people or more than five times the current number of taxpayers. Instead of serving as the city’s emergency manager and instantly becoming one of America’s most famous lawyers, Kevyn Orr would be commuting anonymously from Chevy Chase to his downtown Washington office.
Much has changed in the relationship between rulers and the ruled in the eight centuries since the Magna Carta but, even then, the king was sufficiently concerned about losing taxpayers that he included clause 42 making it unlawful for subjects to leave the kingdom. At least with respect to the largest taxpayers, it is hard to see how this would have been a problem as their assets consisted largely of land that would have been difficult to roll up and carry off to some other country.
Now, not so much.
Even freely elected governments have minorities that voted against them. A high-handed approach by the majority might seem a good way to get rid of pesky opponents, but it is less effective when they leave and take their tax dollars with them.
The first stop might be the streets as in much of the Arab world, Turkey, Brazil, Israel, Russia, Chile and even the United States, but the next stop could be someplace that appears more hospitable.
Whatever the league tables may tell you about relative performance, more people are both better educated and members of the middle class (the Holy Grail of taxpayers) than in the past. They have higher expectations and they are more mobile. If political leaders are not responsive, the well educated middle class will find those who are.
And their tax dollars are not all that disappear. Their skills leave too.
Demanding performance of government officials does not make voters hardhearted, flinty eyed, mean-spirited or selfish. It makes them smart. It might look selfish, but they are actually making their communities more attractive than those next door or in the next state.
Why not evaluate the effectiveness of government programs before pouring money into them? Even government employees, who can be counted on to oppose anything that would make them redundant, might well pause to consider who will be left to support their generous retirement programs if taxpayers have become fed up and left.
According to Fred Hiatt in Divided We Stand, “journalist Bill Bishop coined the phrase ‘the big sort” in 2004 to describe the increasing political homogeneity of American living patterns.” If someone does not like his community, he can easily choose another.
While this is divisive if the choice is based on left-right political issues, it might be less so if based on which set of elected officials seems less likely to run your city, state or country into the ditch.
It is hard to find opponents of home ownership (well except, as we have recently learned, by those who can’t pay the mortgage), but few politicians are willing to say that homeownership also makes taxpayers less mobile and thus more likely to stay where they are and absorb the consequences.
Yes, governments compete and their elected officials better serve their constituents by doing so. It seems ironic that the automobile made Detroit great before taking its inhabitants elsewhere and reducing it to bankruptcy.