Overview

This is a systematic exploration of the hypothesis that governments are internally competitive, that they are competitive in their relations with each other and in their relations with other institutions in society which, like them, supply consuming households with goods and services. The author contends that competition not only serves to bring the political system to an equilibrium, but it also leads to a revelation of the households' true demand functions for publicly provided goods and services, and to the molding of a link between the quantities and the qualities demanded and supplied and the tax prices paid for these goods and services. In the real world where information is costly, the links may not be perfect, Breton argues, but they will be efficient if competition is vigorous.