Is the "Invisible Hand" Biased? Metropolitan Fragmentation and Individual Choice

Abstract

Despite the fact that "efficiency" has dominated the discussion of metropolitan government (Greer, 1963:12), it is the position of this paper that efficiency is fundamentally irrelevant to an analysis of the politics of metropolitan organization. This is the case because institutional arrangements are so closely tied to the distribution of resources that a change in institutional arrangements inevitably has a redistributional (and thus political) bias. While the "ideal" arrangement of local governments may include a system of fragmented neighborhood governments, in the immediate reality of American government, a move to either consolidate or de-centralize metropolitan government could never be a universally beneficial move. There is no efficiency dividend. For this reason, efficiency arguments for and against fragmentation are pointless, and obscure the relevant political question: who shall and should be helped, and who hurt, by changes in urban institutions? Who should get more and who less?