policymakers demonstrate

Skilled Cities and Efficient Urban Transport 387
9.5 The Organization of Metropolitan Areas
As the spread of new cities in Europe came to an end long ago, for a long time
the European landscape has been dominated by a wide array of monocentric
cities. European cities, probably because they were smaller than their American
counterparts, undertook a structural transformation illustrated by the emergence
of polycentric metropolitan areas. Indeed, the burden of high housing
and commuting costs may be alleviated when secondary employment centres
are created. Such a morphological change in the urban structure puts a brake
on the re-dispersion process and allows big cities to maintain, to a large extent,
their supremacy (Glaeser and Kahn, 2004). Among other things, this points to
the existence of a trade-off between within-city commuting costs and betweencities
transport costs, which calls for a better coordination of transport policies
at the urban and interregional levels.
Urban sprawl and the decentralization of jobs have given rise to metropolitan
areas that include a large number of independent political jurisdictions providing
local public goods to their residents and competing in tax levels to attract
jobs and residents. A few facts documented by Brülhart et al. (2015) suggest
the magnitude of this evolution. Metropolitan areas with more than 500, 000
inhabitants are divided, on average, into 74 local jurisdictions, while local governments
in the OECD raise about 13 per cent of total tax revenue. Therefore, a
cost-benefit analysis of an urban agglomeration cannot focus only on the core
city. Indeed, the metropolitan area is replete with different types of externalities
arising from its political fragmentation. As a consequence, what matters is
what is going on in the metropolitan area as a whole.
The efficient development of a metropolitan area requires a good spatial
match between those who benefit from the public goods supplied by the various
jurisdictions and the taxpayers (Hochman et al., 1995). This is not often the case
because a large fraction of commuters no longer live in the historical centre. In
other words, the administrative and economic boundaries of jurisdictions usually
differ within metropolitan areas. Since constituencies are located inside the
jurisdictions, local governments tend to disregard effects of economic policies
that are felt beyond the political border, an issue that also arises at the international
level. In addition to spillovers in the consumption of public goods, this
discrepancy is at the origin of business-stealing effects generated by tax competition,
which are studied in local public finance. However, this literature has
put aside the spatial aspects that play a central role in the working of metropolitan
areas. For example, the huge Tiebout-based literature leaves little space for
urban considerations.
To the best of our knowledge, urban economics is not used as a building
block in models studying the workings of a metropolitan area. Thus, research
needs to be developed that recognizes the importance of the following aspects