Resumen de Sorting Through the Determinants of Local Government Competition

Michael Overton

• Competition among local governments for business investment and residents is a key feature of metropolitan governance scholarship. Despite the excellent work exploring interjurisdictional competition, the conceptualization and operationalization of competition still lack the necessary complexity to fully capture the determinants of competition. In reality, the degree of competition between local governments is a multidimensional concept. How do the different dimensions of competition impact a city’s own-source revenue yield? Using a Spatial Durbin Model (SDM) to analyze a sample of 2,299 U.S. cities, this study finds that household income differentiation and manufacturing differentiation are important in a city’s revenue yield, and both types of differentiation limit head-to-head competition among local governments. In addition, the results indicate that entry barriers and collaboration affect a city’s revenue yields, while the number of cities in a metropolitan statistical area (MSA) does not influence those collections.