Preference aggregation is a huge problem. When transacting is out of reach, we get politics as the default -- and all the grievances that go with it.
Today's NY Times Sunday Dialogue ponders "Can Suburbs Help Cities?" The idea of regionalism has been kicking around for a long time. Those who have moved to the suburbs, so the story goes, have skirted their obligations to those "left behind" in the cities. Simple justice requires that they not get away with this and that we corral them via regional government There is the linked idea that suburbanites get benefits from the cities that they do no fully pay for.
But that is not the way we address gains from trade in any other context.
In the regionalization process, we cartelize government and lose choice. More choice is better than less. Arnold Kling has argued that we have governmental units that are too large and choice that is too restricted. I agree. Making jurisdictions bigger, more remote, and less accountable to voters is precisely the wrong direction. It is just bail-outs by another name. Detroit (and other cities) got into the predicament precisely that way. It is interesting that proposed antidotes are often prescriptions for more of the same, but big-time the next time.
On a related note, the Times also reports on the city's race for mayor, "16 Vying to Lead Troubled Detroit." In this job market, we have gotten used to job openings drawing large crowds of hopefuls. Or is that these 16 cannily see that the Detroit mayor these days has no authority and no influence and not much to do.