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Local Redistribution and Local Democracy

Local Redistribution and Local Democracy: Interest Groups and the Courts

Copyright Date: 2011
Published by: Yale University Press
Pages: 235
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  • Book Info
    Local Redistribution and Local Democracy
    Book Description:

    The traditional theory of urban finance argues against local redistribution of wealth on the assumption that such action is likely to chase away the relatively wealthy, leaving only the impoverished behind. Nevertheless, Clayton P. Gillette observes, local governments engage in substantial redistribution, both to the wealthy and to the poor.

    In this thoughtful book, Gillette examines whether recent campaigns to enact "living wage" ordinances and other local redistributive programs represent gaps in the traditional theory or political opportunism. He then investigates the role of the courts in distinguishing between these explanations. The author argues that courts have greater capacity to review local programs than is typically assumed. He concludes that when a single interest group dominates the political process, judicial intervention to determine a program's legal validity may be appropriate. But if the political contest involves competing groups, courts should defer to local political judgments.

    eISBN: 978-0-300-17182-2
    Subjects: Law, Political Science

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
    (pp. ix-xiv)
  4. CHAPTER ONE The Scope of Local Competence
    (pp. 1-30)

    In july 2006, the Chicago City Council brought what it likely thought was a climactic conclusion to a controversial proposal that required a few local employers to pay their workers a “living wage.” The 35 to 14 vote increased the minimum wage payable by covered employers to $10 per hour, plus $3 in benefits per hour, by July 2010. The new wage represented a substantial increase over the then-applicable federal minimum of $5.15 per hour and even exceeded the Illinois statewide minimum wage, which was scheduled to reach only $8.25 by the time the ordinance became effective. Primary proponents of...

  5. CHAPTER TWO Why Does Local Autonomy Matter?
    (pp. 31-52)

    In this chapter, I discuss the purposes of local government. I then relate those purposes to the propriety of local redistribution and to the acceptable conditions for a working political process. My objective is to lay the basis for claims in later chapters that the orthodox theory of urban finance may understate the extent to which a locality characterized by a well-working political process would be willing to adopt local redistributive programs. In contrast, the absence of such a process could, consistent with the orthodox theory, serve as a signal of inappropriate local redistribution.

    Determining the proper scope of local...

  6. CHAPTER THREE The Meaning and Scope of Local Redistribution
    (pp. 53-71)

    Government statistics on local redistribution and the orthodox theory are both concerned with the reallocation of resources from the “haves” to the “have nots.” But local redistribution looks even more pervasive once we include redistribution to the relatively wealthy. The orthodox theory should apply with equal force to municipal expenditures that favor subsidies for the wealthy and that confer direct benefits on few residents. Although municipal subsidies for sports stadiums, big-box retailers, or industrial firms are typically defended on the grounds that they return net financial benefits to the sponsoring locality by increasing local economic activity, employment, and tax base,...

  7. CHAPTER FOUR Why Do Local Governments Redistribute?
    (pp. 72-105)

    The orthodox theory denies both the practical availability and the desirability of local redistribution. Efforts to redistribute allegedly induce exit by individuals and firms who are necessary to the financial health of the locality and attract a disproportionate share of residents who will receive net benefits from redistributive programs. So why do localities redistribute wealth? I suggested in chapter 1 that there are both benign and malign answers to that question. In this chapter, I expand on that distinction, discuss some of the explanations that have been offered for this phenomenon, and elaborate on their credibility.

    I have also indicated...

  8. CHAPTER FIVE Local Political Markets and State Constitutional Constraints
    (pp. 106-141)

    I have suggested in the preceding chapter that local officials have both publicly interested and self-interested motivations to redistribute wealth, and that agglomeration economies provide the opportunity to act on either of those motivations without fear of significant exit by those who pay redistributive taxes. The same situational monopoly that makes benign redistribution possible, therefore, simultaneously facilitates malign redistribution. In theory, we would prefer that localities enact benign redistribution and avoid the malign. Achieving that result, wholly apart from the operational difficulty of distinguishing between the benign and the malign, poses theoretical difficulties of its own. Any effort to invalidate malign...

  9. CHAPTER SIX Proxies for Distinguishing Benign and Malign Redistribution
    (pp. 142-173)

    What does it mean for courts to reverse engineer local redistributive legislation in order to neutralize the distorting effects of dominant interest groups? I certainly cannot claim that review of the legislative history from which local action emerged can provide the needed evidence of interest group influence. Since interest group pressure at the local level to a large extent occurs outside the public processes of government decision making, through lobbying and promises of campaign efforts on behalf of receptive local officials, perusal of public records would not necessarily reveal the presence of dominant interests. Records of debates or committee hearings...

  10. CHAPTER SEVEN The Limits of Judicial Intervention
    (pp. 174-195)

    Let us assume that there are cases in which courts reliably conclude that the political process by which a locality enacted a redistributive program was sufficiently dominated by a particular interest group to trigger a presumption of malign consequences. I have suggested to this point that courts might consider that factor when the program is challenged for violating some constraint on local autonomy. In theory, such interventions could reduce distortions of residents’ preferences and thus enhance the values inherent in decentralized decision making. Are there still reasons why we would not want courts to take such motives into account when...

  11. CHAPTER EIGHT Conclusion
    (pp. 196-200)

    When practice deviates from theory, something is wrong. The problem could be with the practice, in that actors charged with achieving the results that theory predicts act in an inappropriate manner. Or, the problem could be with the theory itself. With respect to the deviation between the orthodox theory of urban finance, which criticizes local redistribution, and practice, which endorses it, both problems appear to be at work. The orthodox theory understates the extent to which local governments can obtain unique benefits or otherwise reflect local preferences by redistributing wealth. The practice, however, may reflect political dominance by groups who...

  12. NOTES
    (pp. 201-224)
  13. INDEX
    (pp. 225-235)