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I'd personally flip 4 and 5 since I think having incentive not to screw you and recourse if you get screwed is important. Local businesses have much more reason not to screw people and people have much more recourse when screwed compared to state or national government.

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I'd agree, another way to look at is who do you have the greatest recourse to when something goes wrong.

Local businesses will often be more sensitive to their customers than local governments. National governments will be even less sensitive.

Local businesses can't shoot your dog or take your kids and say "oops, take it to court if you don't like it" (well they can, it'll just work out very, very badly for them).

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