The Public Agglomeration Effect: Urban-Rural Divisions in Government Efficiency

• In Event: Historical International Political Economy

Abstract

This paper introduces a new explanation of the urban-rural divide in voting and its emergence in the US in the 1930s: agglomeration effects. The provision of government services should be more efficient in urban environments because of nonrivalries, economies of scale, and access costs. If the public sector in cities is more efficient, and voters face a tradeoff between taxation and government spending, urban voters should be more supportive of higher taxes and spending. When redistribution is salient, one should observe an urban-rural divide in voting. As predicted by a formal model, more-urban locations faced lower costs of providing public services and shifted towards the Democrats as the party implemented the New Deal. In addition, urban voters were more supportive of government spending. In the UK, the urban-rural divide also accompanied the rise of redistributive politics. Agglomeration effects influence preferences for redistribution and create political cleavages.

Author

• Theo Serlin, Princeton University