Local public entrepreneurship is a concept which encompasses a variety of activities carried out by local governments to foster local economic development. The first part of this paper puts forward local public entrepreneurship as a windfall of the right to local selfgovernment. In the second part two cases are presented -one from EU and one from USwhere local public entrepreneurship is playing a major role. However, in the EU the ECJ jurisprudence is discouraging local governments to engage in

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... such activities thereby undermining the right to local self-government. By contrast, the US legal system actively encourages a high level of local public entrepreneurship for the production of urban services and infrastructure. In the conclusive part I suggest to have a formal recognition of the economic liberty of local governments and to implement democratic counterbalances to such liberty rather than limiting it by law or judicial intervention being this a matter of exquisitely political nature. 2 1. TOCCATA (OR PRELUDE)... : The Hayek-hypothesis. Local governments as competing quasi-commercial corporations 1 . Since its birth the Tiebout model has divided the field of local government scholarship into two main schools of thought, its estimators and its detractors. Here I build on Tiebout's intuition that local governments shall compete with each other. But I analyze this phenomenon from a slightly different perspective. Tiebout's cutting-edge study 2 asserted that local governments compete with each other to convey more taxpayers into their jurisdiction by offering packages of local public goods at competitive tax-prices. From this standpoint they act just as private firms which would compete for consumers by offering competitively priced private goods. "Exit" or "full mobility" of citizens is the crucial device that ensures efficiency. Taxpayers can leave inefficient cities/markets for cities/markets that produce preferred public services at a lower tax-price. 1 Toccata (Italian for "to touch") is a piece of classical music mainly for organs, composed to emphasize the dexterity of the performer. The form first appeared in the late Renaissance period. It originated in northern Italy. But it was in Germany where it reached its full development, culminating in the work of Johann Sebastian Bach more than a hundred years later. The Baroque toccata increases in intensity and virtuosity from the Renaissance version, reaching heights of extravagance equivalent to those of the architecture of the period. Bach's toccatas are among the most famous examples of the form. His toccatas for organ are often followed by an independent fugue movement. The fugue begins with a theme, known as the subject, stated alone in one voice. A second voice then enters and plays the same theme, beginning on a different degree of the scale. The remaining voices enter one by one, each beginning by stating the same theme (with their first notes alternating between the same two different degrees of the scale). The remainder of the fugue develops the material further using all of the voices and, usually, multiple statements of the theme. This description is an adaptation of the entries "toccata" and "fugue" drawn by Encyclopaedia Britannica.