This hypothesis by Charles Tiebout is not without many criticisms that were voiced against it and emanating from diverse sources of the field of economics. Probably, the most important of those (criticisms) is the fact that, the hypothesis is in total discord with the principle of equity. This principle emphatically states that equal opportunities of growth and prosperity need to be provided to all the people. And Tiebout Hypothesis is diametrically opposite to that, as it supports the presence of goods & services, and taxes, conforming to the monetary interests of a particular section of a province’s populace.
The second criticism that has been leveled against the hypothesis is that, it has come to the assumption that people can conveniently keep moving between various zones, until they identify a province supporting their interests. The real life scenario is the testimony to the fact that, constant mobility for a substantial chunk of the population is not as easy as stated by Charles Tiebout. For most of the people, the financial implications of frequent travelling are beyond their means, not to mention the huge efforts and time involved in it.
In a scenario pertinent to this model, as the number of people being benefitted by the goods and services registers a rapid increase, the rate of enhancement of related costs also displays a rapid rise. The obvious outcome of this being, a significant chunk of the province’s populace would be bogged down by the alarming high costs, and they would then resume their search for greener pastures (low cost zones). (SOURCE 1)
Last but in no way the least, is the fact that the Tiebout Model fails to address the above-mentioned aspect of efficiency, from another angle. As the costs of goods and services display a rapid rise, it has been observed that many people would be compelled
The Hypothesis explains about the scenario that results, when various provincial governments provide diverse types of goods and services for the general welfare of the public,…
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