The development of the local public goods theory

The theory of local public goods is based on the theoretical considerations from the Tiebout’s hypothesis, which was the first claim regarding the geographic dimension of public goods. This hypothesis reflects preferences in terms of different type of goods. This paper addresses an analogical conceptual approach between Tiebout’s model and the model of market under perfect competition; it discusses theoretical developments of these conjectural considerations which have given a broader and deeper sense to the Tiebout’s statements. This study describes how additional elements can provide more powerful interpretative applications of the theory of public goods.