Think back to the example in the warm-up: a business owner wants to open a restaurant, but many residents do not want a business that is open late at night near their homes. how are local governments structured to solve a local issue like this one

Local like municipal governments can deal with residents in the neighborhood of a proposed restaurant concerns re noise late at night by restricting their closing hours to say 8 or 9PM and also not issuing them a liquor licence, as examples of what they can do.