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For an economy without public goods, in Hammond and Sempere (2004) we show that, under fairly standard assumptions, freeing migration would enhance the potential Pareto gains from free trade. This paper presents a generalization allowing local public goods subject to congestion. Our new result relies on policies which, unlike in the standard literature on fiscal externalities, fix both local public goods and congestion levels at their status quo values. Such policies allow constrained efficient and potentially Pareto improving population exchanges regulated only through appropriate residence charges, which can be regarded as Pigouvian congestion taxes.
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