Free To Choose…If There Are Available Alternatives
Milton & Rose Friedman:
To some extent government is a form of voluntary cooperation, a way in which people choose to achieve some of their objectives through governmental entities because they believe that is the most effective means of achieving them.
The clearest example is local government under conditions where people are free to choose where to live. You may decide to live in one community rather than another partly on the basis of the kind of services its government offers. If it engages in activities you object to or are unwilling to pay for, and these more than balance the activities you favor and are willing to pay for, you can vote with your feet by moving elsewhere. There is competition, limited but real, so long as there are available alternatives.
As this quote shows, competition between governments is not a new view – the words above were written in 1979, and the Tiebout model was published in 1956. What is new, we believe, is the idea that competition is the primary route by which governments can be improved. Writing great rhetoric for the masses (like Free To Choose), forging political coalitions (the LP, liberaltarians, or Ron Paul), and “winning the war of ideas” in academia (like those smart fellows at GMU) are all enjoyable, appealing, and attractive. But the evidence of the last half-century is that, sadly, big wasteful government is robust to those methods. As long as the industry is an oligopoly, we customers will be badly served.
What the industry needs is more available alternatives – as would happen if we Let A Thousand Nations Bloom.
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Let A Thousand Nations Bloom 
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Both barriers to entry and number of entrants must matter in the short run. But I agree with lukas that barriers are what matter most. The long-run gets shorter every day.
Seems to me if the article is pursuing “vote with your feet,” that it is very much necessary to keep borders as open as possible (i.e. easier to see the productive competition amongst counties and states than countries, as some of our commentators seem to suggest). That *literal barrier* to entry from the new government seems more to Devin’s point than the one about barriers to entry about joining and changing government.
Of course, the huge immigration culture of the US has long been seen as a triumph for competition amongst countries (in US favor), whatever it’s become in recent times with Americans wanting/needing to exclude people from voting with their feet and coming here.
Devin,
the level of competition is not determined by the number of players in the market… barriers to entry are much more important. And the barriers to entry for the market in governance are very high indeed.
lukas,
Barriers of entry matter, but the absolute number of competitors matters a lot. Even with complete barriers to entry, governments should be competing with each other to attract economically productive citizens. Why hasn’t any government in the world created a libertarian special economic zone that aims to attract the world’s smartest engineers and entrepreneurs?
But lots of governments are doing just that
What makes you think that government institutions are robust to academic influence? I should think that all the appeals to Keynes in this recession would suggest the opposite.
There are ~192 countries in the world. There are far more countries than search engines, computer operating systems, CRM systems, credit card providers, car companies, etc. etc. The government industry is far from an oligopoly. So why don’t we already see the benefits of competing governments?