Explain two problems of competitive federalism

What will be an ideal response?

Answer:
An ideal response will:
1. Discuss the "race to the bottom" where local governments are so aggressive in attracting potential businesses, e.g. lowering tax obligations, that the costsâ€"less tax revenueâ€"to government and the community outweigh the benefits of the new firm.
2. Describe the "moat and gate" problem that arises from using zoning and public services to make a city or county unattractive or cost-prohibitive to many potential residents.