MOBILE CAPITAL, LOCAL ECONOMIC REGULATION, AND THE DEMOCRATIC CITY

Introduction This Article examines municipal efforts to control, regulate, and redistribute mobile capital. The conventional economic story is that it is quite difficult (and counterproductive) for subnational governments to attempt to control capital flows or engage in redistribution. 1 Local governments are said to be particularly disabled because they are relatively small and cannot easily control migration across their borders. Because of interjurisdictional competition, local governments have a relatively limited set of policy choices. Mobile capital will flee aggressive efforts to regulate it. Thus, urban politics must invariably be biased in favor of mobile capital - cities must be "business friendly" - while robust economic regulation must necessarily take place at a higher level of government. More importantly, territorially limited local jurisdictions can only weakly counter large-scale processes like deindustrialization, suburbanization, and globalization. While potentially painful, plant closings, the movement of manufacturing to the South or overseas, the movement of persons out of old, cold cities to new, warm ones, or out of cities into suburbs, are unavoidable consequences of relatively open economic markets. 2 Cities nonetheless have long sought to entice mobile capital. They have also attempted to constrain or redistribute capital once in place. The latter is my focus here, as cities have recently engaged in a flurry of efforts to redistribute capital, place conditions on it, or limit its entry. These efforts include municipal minimum and living wage ordinances, local labor laws, and anti-chain and anti-big box store zoning ordinances. Moreover, local nonprofits - ...