Sorting Charles Tiebout: The Construction and Stabilization of Postwar Public Good Theory

A substantial and diverse literature in economics traces its intellectual roots to Charles Tiebout's 1956 article, "The Pure Theory of Local Expenditure." Its present recognition frequently attributed to originating the idea of "voting with your feet," however, contrasts sharply with its obscurity during Tiebout's academic career, which was tragically cut short by his passing in 1968. Penned as a qualification to Paul Samuelson's "pure theory," the article failed to influence the stabilization of postwar public good theory, despite Tiebout's engagement with key figures in its construction. Moreover, his death preceded the application of its central mechanism to public, urban, and environmental topics via hedonic, sorting, and computational general equilibrium models. Viewed in this way, the history of Tiebout's article, and thereby the history of public economics, has remarkably little to do with Tiebout himself. Professionally, though, the article reflected Tiebout's lifelong interest in issues of local economies and governance. The social and political context of urban sprawl and political fragmentation that accompanied the rapid growth of metropolitan area, such as Chicago, Los Angeles, and Seattle, raised novel questions in local public finance for researchers before a knowledge community existed to credit their work. For Tiebout, it stimulated his collaboration with Vincent Ostrom and Robert Warren and later involvement in the burgeoning interdisciplinary field of regional science.