||In the US, the 49 largest metro regions account for more than 70% of GDP. Large metro
regions are, and will continue to be, the centers of US growth and prosperity. Therefore,
it is important to determine how to govern metro regions to ensure their continued
economic success. Do united metro region governance structures result in better spending
policies oriented towards long-term economic growth, or, do fragmented metro regions
prosper because local government competition fuels more effective spending policies?
By looking at metro region unity, local government spending policies, and the economic
growth of the 49 largest US metro regions, I find that united local government is
better for economic growth. In united regions, local governments face less pressure
from neighboring municipalities to compete for people and firms in the short-term.
This allows municipalities in united regions to engage in less short-term consumption
spending designed to lure consumer-voters from neighboring municipalities, resulting
in improved economic growth prospects for the entire region. These conclusions suggest
that to encourage economic growth in our large metro regions, we should pursue governance
structures at the metro region level, rather than the village, town, city, or county