Working Paper No. 11-11:
I Would, but I Need the Eggs: Why Neither Exit Nor Voice Substantially Limits Big City Corruption
Date Posted: February 2011
Abstract (below) | Full text (most recent) on SSRN
Employing tools drawn from economics and urban studies – particularly agglomeration economics, public choice, and the wisdom of Woody Allen's classic film Annie Hall -- this essay provides a theoretical explanation for the prevalence of big city political corruption. The essay argues that the reason we see more government corruption in big cities than in other jurisdictions is that they are largely immune to the traditional cures for corruption, exit and voice. The location decisions of big city residents are, under dominant theories of urban economic theory, sticky in the face of bad governance, reducing the effect of inter-jurisdictional competition on the behavior of officeholders. Further, big cities rarely if ever see real partisan competition, leaving under-informed voters without the tools to punish all but the worst forms of unresponsive or corrupt governance. Traditional remedies -- ranging from encouraging exit to non-partisan elections -- either do not solve the problem or create substantial costs of their own. The essay concludes by arguing that election laws in cities should be reformed in order to encourage the development of political parties that are differentiated on local issues. Alternatively, cities should provide voters with locally specific party-like heuristics by allowing prominent elected officials like Mayors to endorse other local officials on the ballot. This would improve local democracy, and thereby address the root causes of urban political corruption.