Diverse Cities Spend More

Previous authors have argued that ethnically diverse cities spend less on public goods than their homogeneous counterparts. In this paper, I present new evidence that challenges this claim. Incorporating improved measures of local expenditures in a panel study of US cities, I find that diversifying cities spend more per capita on most public goods – including police, fire protection, sanitation, and parks. This does not appear to come at the expense of other categories of spending. To help explain this finding, I develop a computational model in which agents migrate between competing jurisdictions. The model demonstrates that when residents are allowed to sort themselves across municipalities, the anticipated effect of diversity on public spending vanishes. The most recent version of this paper is available at: https://sites.lsa.umich.edu/ornstein/dcsm/ ∗PhD Candidate, University of Michigan. Many thanks to Liz Gerber, Jan Pierskalla, Kirill Zhirkov, the participants of the Michigan Political Economy Workshop, and the 8:00 AM attendees of the 2017 APSA panel on the Political Economy of Local Public Goods Provision for all of their helpful suggestions.