The Fractured Metropolis: Optimization Cutoffs, Uneven Congestion, and the Spatial Politics of Globalization

TL;DR

This paper introduces a novel framework viewing globalization as constrained by domestic institutional capacity, explaining US-China divergence and global polarization through the concepts of Optimization Cutoff and Capacity Trap, supported by empirical textual analysis.

Contribution

It proposes a new theoretical model of globalization as a 'Congestible Club Good' influenced by institutional capacity, and empirically demonstrates increasing institutional disorder from 2000 to 2024.

Findings

Exponential increase in disorder-related keywords in texts (from 272 to 1,333)

Empirical evidence of institutional capacity failure, such as immigration backlog

Globalization crisis linked to uneven institutional capacity and political paralysis

Abstract

The divergence in globalization strategies between the US (retrenchment and polarization) and China (expansion) presents a puzzle that traditional distributional theories fail to fully explain. This paper offers a novel framework by conceptualizing the globalized economy as a "Congestible Club Good," leading to a "Fractured Metropolis." We argue that globalization flows ($M$) are constrained by domestic Institutional Capacity ($K$), which is heterogeneous and historically contingent. We introduce the concept of the "Optimization Cutoff": globalization incentivized the US to bypass costly domestic upgrades in favor of global expansion, leading to the long-term neglect of Public Capacity ($K_{Public}$). This historical path created a deep polarization. "Congested Incumbents," reliant on the stagnant $K_{Public}$, experience globalization as chaos ($MC>MB$), while "Insulated Elites" use Private Capacity ($K_{Private}$) to bypass bottlenecks ($MB>MC$). This divergence paralyzes the consensus needed to restore $K_{Public}$, creating a "Capacity Trap" where protectionism becomes the politically rational, yet economically suboptimal, equilibrium. Empirically, we construct an Institutional Congestion Index using textual analysis (2000-2024), revealing an exponential surge in disorder-related keywords (from 272 hits to 1,333). We triangulate this perception with the material failure of $K_{Public}$, such as the 3.7 million case backlog in US immigration courts. Our findings suggest the crisis of globalization is fundamentally a crisis of uneven institutional capacity and the resulting political paralysis.