Sunday, October 16, 2016

Brexit and Tiebout

In a well-known, controversial vote held in June, the people of the United Kingdom voted to leave the European Union - a decision universally known as "Brexit." The "leave" camp passed by a vote of 52% to 48%, with a voter turn out of over 70%.

While, of course, there are numerous views regarding the advantages and disadvantages of this decision, Tiebout likely would have said that the vote should not have even occurred in the first place. If UK citizens were unsatisfied with the revenue-expenditure patterns of their government, the best option would be to vote with their feet and move to another "community," or in this case, country. Tiebout's argument is based around the fact that individuals have heterogeneous preferences, and so providing goods in a heterogeneous fashion eliminates forced conformity. Tiebout asserts that the governments' revenue-expenditure patterns should be taken as given and individuals should move to the locality in which that system best meets their preferences; in this case, the best option would have been for unhappy individuals to move to a different community.

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