entities which locate in densely developed areas, it also encompasses such considerations as how the patterns of location evolve and change, how the patterns of location are affected by government expenditures, taxes, and regulations, and how the patterns of location affect the economic performance of both firms and households (Levy, pp. 4-8). The composition of the population of any given community is a significant factor in the determination of the mix of the goods provided in that community. Conversely, government may develop a specific mix of publicly provided goods with an intention of attracting and manipulating a population mix for an area. Road improvements, as an example, may make it possible for more people to locate in a specific area, because access between that area and major job location centers is facilitated by the improved roads. By financing road improvements, as opposed to mass transit improvements, a government may promote to location in an area of higher income families, who are able to afford the higher transportation costs involved, and who would not likely object to an additional tax to provide for improved roads.
Simply attracting new firms and households to an area, however, is not sufficient (Levy, pp. 4-8). Once new residents have been attracted to an area, additional services--parks, recreation, and public safety, as examples--will be demanded. A failure by government to provide these additional services may deter continued relocation to the area, thereby undermining the intent of the initial efforts to attract new firms, households, and individuals. Similarly, at some point, government, by refusing to provide further infrastructure development, may tacitly implement what may be interpreted as a no growth policy. Such an approach has been adopted by many communities. More often than not, however, government tends to act in ways which promote growth.
Rational infrastructure development upon wh...