This paper analyzes the effect of industrial location on the provision of local public goods in two regions. Initially, two regions are asymmetric because industrial firm agglomerates in one region and the other region do not provide a local public good. When industrial firms disperse across regions, the local government that does not provide it gets the larger revenue. In this case, this paper analyzes whether the local government provides it or not. The results depend on the population

more »

... the land rent. Only when the population belongs to some range, through industrial dispersion, does the local government change the behavior toward the local public good. In this case, the industrial distribution will make the local decentralization is desirable for efficiency without the central government's intervention.