Zodrow, George and Peter Mieszkowski (1986), "Pigou, Tiebout, Property Taxation and the Under-Provision of Local Public Goods." Journal of Urban Economics, 19(3), 356-370.

Pigou’s proposition that the use of distorting taxes rather than neutral head taxes reduces public service levels is examined in this paper. A simple model with a national system of competing local governments is utilized to demonstrate that the use of a distorting property tax on mobile capital decreases the level of residential public services. The case where public services are an intermediate producer good is also considered.