If this contest happens repeatedly, even the firm with the monopoly privilege will on average earn no more than a normal rate of return. Explain your answer using economic arguments. Suppose that politicians really do become worse agents of voters as their time in office goes up. Then I would expect term limits to have better effects than spending limits. List three services the federal government provides and three services provided by the state of Virginia.
Many people argue public schools, by raising levels of human capital are a public good.
Overall, it is not clear from my examples that Virginia focuses more on local public goods than the feds do. According to the Tiebout model, public education is already, in a sense, competitively supplied. Local governments have to provide quality education for tax dollars, because if they don't, people will move to other districts that do. Thus, on the Tiebout view, the benefits of the voucher system would be small or non-existent, because there is already competition. The main problem with this argument, in my opinion, it that is assumes that government tends to supply the level of welfare that most benefits the median voter.