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Local government law has fallen behind the times. Over the past two decades, economists have developed a deep understanding of "agglomeration economics, " or the study of how and why mobile citizens and firms locate in cities. Their work argues that people decide to move to cities because of the reduced transportation costs for goods, increased labor market depth, and intellectual spillovers cities provide -that is, individuals and firms locate in cities in order to get the benefits of being near one another. Economically minded local government law scholars have largely ignored this burgeoning literature and instead have continued to examine exclusively a separate set of benefits people get from their location decisions, the gains from "sorting." As analyzed in the well-known Tiebout model, individuals move between local governments in a region in order to receive public policies that fit their preferences. This Article seeks to develop the framework for a modern law and economic method for analyzing local government law. Specifically, it claims that there is an inverse relationship between the gains from agglomeration and sorting.

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