Capitals as bad equilibria

Abstract

Throughout the recent pandemic, governments used digital video technologies to facilitate social distancing during political meetings. In addition to enabling social distancing, a theoretical advantage of virtual political governance is that it has the potential to mitigate the hierarchical administrative relationship between capitals and regions and the differences in real estate prices and wealth that often follows from such hierarchical structures. However, hardly any governments are currently planning a long-term transition to work-from-home digital governance. On the contrary, several countries are doubling down on the centralization model of government by building new capitals in new locations. This article proposes that in a time of digital alternatives, physically centralized “capitals” could be considered examples of bad equilibrium.