Th e Self-Maximizing Citizen and the Tiebout Hypothesis 207
being exchanged, with whom, and by what mechanism is simply not as intuitively
or empirically obvious as the market for, say, cars or soft drinks.
Th e market analogy becomes much sharper when rational choice turns its at-
tention to citizens and the services produced by local governments through public
agencies. In the rational choice framework, citizens consume public services; the
patterns and motivations of their consumption can become the rough equivalents
of consumption patterns in markets for cars or soft drinks. Th is analogy will not
be perfect. By defi nition, a public good is indivisible, something that cannot be
broken up and distributed individually. For example, an individual consumer can
purchase a car or a can of soda based on personal preferences with relatively little
input from or impact on anyone else. Th is is hard to do with public goods, such
as clean air or national defense, because they require binding collective decisions
rather than individual ones. Traditionally, such goods were considered to be sub-
ject to market failure; that is, left to themselves, free-exchange mechanisms would
either underproduce these goods or not produce them at all. For this reason, the
production of public goods traditionally is held to be appropriately concentrated
under government control. From here it is but a short step to prescriptively em-
bracing administration orthodoxy—public goods and services can be most eff ec-
tively and effi ciently provided by functionally organized agencies with centralized
jurisdictions. Th us, one public bureaucracy should provide, say, law enforcement
for a given area. Th is will ensure that a vital public service is available to all, avoid
duplication of service, simplify command and control, and, in doing so, promote
effi ciency and accountability.
One problem with this line of reasoning is that some goods and services fall
into a gray area between public and private. Education and garbage services, for
example, are provided by both the public and the private sectors. Private contrac-
tors, and therefore the free market, play a role in providing even “pure” public
goods, such as national defense. Th e fuzzy line between public and private goods
provides an intellectual leverage point for arguing that the mechanisms used to
provide the latter might be able to handle a greater role in providing the former.
When that lever is pulled, public administration orthodoxy crashes head-on into
basic economic theory. What James Q. Wilson or Max Weber might call a well-
run public bureaucracy, Adam Smith and Milton Friedman might call a monop-
oly. Monopolies are unresponsive and ineffi cient producers because, according
to the axiom of self-interest, they have no reason to be otherwise. Th e consumer
has no option but to buy the monopoly good at the monopolist’s price, and the
monopolist has all the advantages in the producer-consumer exchange. If, as
Tullock, Downs, and Niskanen argued, bureaucrats are self-interested, and pub-
lic agencies are in eff ect monopoly producers of public goods and services, the
citizen-consumer may be getting a very bad deal from the centralized bureaucra-
cies advised by traditional public administration orthodoxy. A better arrange-
ment would be a market for public services, where instead of one centralized
agency in one jurisdiction, citizen-consumers have a broad variety of tax-service