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Lee Anne Fennell [View as PDF]
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112 Yale L.J. 617 (2002)
In this important new book on local governance, economist William Fischel presents and defends a deceptively simple and intuitively resonant proposition: "that homeowners, who are the most numerous and politically influential group within most localities, are guided by their concern for the value of their homes to make political decisions that are more efficient than those that would be made at a higher level of government." The book makes both positive and normative claims about the workings of local government. The positive claim can be boiled down to two words: Homes rule. The home represents most homeowners' single largest asset, an undiversified holding subject to uninsurable drops in value. In Fischel's account, homeowners are driven to wield their considerable political power in the manner that will maximize the value of this asset. He dubs these property-value-conscious homeowners "homevoters" to emphasize the link between their home ownership and their political behavior.
The normative claim can be approximated with the addition of an exuberant exclamation point: Homes rule! Fischel reins in his enthusiasm for the outcomes generated by risk-averse homevoters in the final chapter, but the book generally smiles on the results that flow from allowing home values to dominate the political process. Thus, Fischel undertakes to show us not only how local politics works, but also how well local politics works--at least when evaluated using the criterion of efficiency and when considered in comparison with the available alternatives. A homeowner will generally make socially responsible political decisions, Fischel argues, because anything that affects the community will ultimately be reflected in her home's value through capitalization.
While one need not accept Fischel's normative points to appreciate his positive ones, the normative tilt of the book is integral to the analysis and indeed appears to have been an important catalyst for the work. Drawing on decades of his prior work, Fischel formulates a careful, thoughtful, and well-supported apology for local government. By the time Fischel confronts some of the failures of local government in the final chapter, there is no doubt that the "tough love" reforms he prescribes are based on real, abiding, and well-considered appreciation. This is clearly a form of governance that he wants to see survive.
Fischel's book reflects genuine affection not only for the subject of his study--local government--but also for the scholarly undertaking itself. He writes in an entertaining and accessible style and deftly synthesizes much of the current legal and economic scholarship on local governance. Not content to theorize abstractly from the armchair, Fischel goes out to real places and sniffs things out (sometimes quite literally) to see whether his claims square with conditions in the real world. Whether or not one ultimately agrees with Fischel's arguments, the book is an eye-opening analysis that challenges the conventional wisdom about local government and offers a powerful template for rethinking the way municipalities function.
The plan of the book is both straightforward and ambitious. In the first four chapters, Fischel explains his homevoter-driven model of local government, working systematically through discussions of capitalization, zoning, the Tiebout hypothesis, and the theory of the median voter. In the next six chapters, Fischel takes his model out into the real world to see how well it works (both in terms of explanatory power and in terms of generating normatively desirable results), scrutinizing the model's applicability to such issues as environmental quality, school funding, and metropolitan sprawl. In the final chapter, Fischel takes a harder look at local government, acknowledges many of the real and unresolved problems of localism, and outlines some ideas for reform. Here, he acknowledges that homevoters may be too risk-averse for their own (and everyone else's) good, and explains that their obsessive fixation on property values can at times yield suboptimal outcomes.
Fischel's well-crafted explication and defense of local government is subtle, perceptive, and quite persuasive. My reservations about the hypothesis involve a cluster of concerns that fall under the general rubric of distributive justice. Although Fischel gives some attention to these concerns, existing inequities in the provision of local public goods are far more troubling than his analysis would suggest. These inequities cannot be dismissed as regrettable by-products of an efficiently operating market-oriented system. Despite the rhetoric of free consumer choice that often surrounds localism, the fragmented and stratified forms of local control that exist in America today are extensively shaped by government intervention.
In this Review, I work through some of the central themes presented in Fischel's book as they relate to the distributive consequences of localism. Significantly, the distributive concerns I raise are also symptomatic of inefficiencies that directly bear on Fischel's efficiency-based normative defense of local government. In Part I, I focus on the background conditions necessary to the operation of Fischel's model and take a closer look at his "homevoters" and their portfolio choices. In Part II, I examine the distributive issues implicated by the model and explain how these distributive concerns correspond to inefficiencies in Fischel's model. In particular, I explore the role played by homeowners' preferences about the people with whom they will be consuming local public goods and the ways in which those preferences--and the socioeconomic stratification that results--can profoundly affect home values, exclusionary zoning choices, locational decisions, and the quality of the local public goods themselves. Because exclusionary choices can push costs across jurisdictional boundaries within a metropolitan region, homeowners' decisions about exclusion are likely to be suboptimal. In Part III, I evaluate Fischel's ideas for reform by assessing their traction in addressing these distributive concerns.
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