Where the Sidewalk Ends

When reading the Tiebout article, "A Pure Theory of Local Expenditures," I found myself considering the ramifications of living on the border of communities. Tiebout assumes away externalities between communities, but as someone who grew up on the border of two counties in Northern Virginia, I can attest that these externalities do exist. Though my childhood home is located in McLean, it is only two houses away from the Arlington border. With no feasible way to exclude people in McLean from the public goods of Arlington, my family was able to enjoy the sidewalks and school playground of Arlington, without paying for those goods through taxes.

One of the clearest sign of leaving McLean and entering Arlington was the presence of sidewalks. Because the neighborhood in Arlington has sidewalks and and the one in McLean did not, the sidewalk abruptly ends on the dividing line. This difference in the provision of public goods highlights Tiebout's point of people moving to the public goods they want provided--maybe people in Arlington value sidewalks more so than the people living in McLean. My family, however, was able to 'freeride' by utilizing sidewalks for walking our dogs every night, without ever having paid the higher Arlington taxes. This example shows why the assumption of no externalities is so important for Tiebout--if these externalities were not assumed away, people would choose to live where they could use the public goods without having to pay for them.