Dennis W. Draper, Discussion: Information Sets, Macroeconomic Reform, and Stock Prices, The Journal of Financial and Quantitative Analysis, Vol. 16, No. 4, Proceedings of 16th Annual Conference of the Western Finance Association, June 18-20, 1981, Jackson Hole, Wyoming (Nov., 1981), pp. 511-513

The paper investigates whether compensation among local jurisdiction is, by itself, sufficient to ensure efficient provision of local public goods. Jurisdictions have fixed boundaries, and each has an entrenched government with the power to tax and supply the public good. Residents can move costlessly among jurisdictions. It is shown that competition among numerous jurisdictions is not sificient to guarantee public sector efficiency. Though residents can "vote with their feet," land is immobile. Hence, governments can unsurp some land rents for their own ends. Increasing the number of jurisdictions limits but cannot completely eliminate the ability to exercise discretionary governmental power.

Reviews the book "Toward A Science of Accounting," by Robert R. Sterling.

The paper investigates whether compensation among local jurisdiction is, by itself, sufficient to ensure efficient provision of local public goods. Jurisdictions have fixed boundaries, and each has an entrenched government with the power to tax and supply the public good. Residents can move costlessly among jurisdictions. It is shown that competition among numerous jurisdictions is not sificient to guarantee public sector efficiency. Though residents can "vote with their feet," land is immobile. Hence, governments can unsurp some land rents for their own ends. Increasing the number of jurisdictions limits but cannot completely eliminate the ability to exercise discretionary governmental power.

Reviews the book "Elements of Income Tax," by Richard H. Visse, Glyn Hanbery and Grant C. Schafer.