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Does administrative status matter for urban growth? Evidence from present and former county capitals in East Germany

Author

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  • Bastian Heider
  • Martin T.W. Rosenfeld
  • Albrecht Kauffmann

Abstract

Public sector activities are often neglected in economic approaches to analyze the driving forces of urban growth and changes in urban hierarchies. One crucial aspect of public sector activities is the institutional status of cities as regional capital. The paper is reporting on a quasi natural experiment on East German county towns. Since 1990, cities in East Germany have shown remarkable differences in their population development. During the same period many towns have lost their former status as county seat due to several administrative reforms. Using a Difference-In-Difference approach we compare the population development of former county capitals to cities successfully holding a capital status over the observed period. The estimation results show a statistically significant and economically relevant positive effect of holding a county capital status on annual population change. We further observe that the difference in population developments is increasing over time. Our results are not only of empirical interest but contribute to the general literature, explaining urban hierarchies and should be considered by policymakers for future policy measures stimulating urban economic growth.

Suggested Citation

  • Bastian Heider & Martin T.W. Rosenfeld & Albrecht Kauffmann, 2016. "Does administrative status matter for urban growth? Evidence from present and former county capitals in East Germany," ERSA conference papers ersa16p308, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa16p308
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    References listed on IDEAS

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    6. Franz, Peter, 1998. "Wie läßt sich die Naherholungsqualität der ostdeutschen Stadtregionen verbessern? Defizite und Handlungsbedarf bei einem weichen Standortfaktor," Wirtschaft im Wandel, Halle Institute for Economic Research (IWH), vol. 4(15), pages 10-15.
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    Cited by:

    1. Felix Rösel, 2021. "Lighthouses with Long Shadows: Former GDR District Towns Still Have Almost 50,000 More Inhabitants Today," ifo Dresden berichtet, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 28(01), pages 10-13, February.
    2. Blesse Sebastian & Rösel Felix, 2017. "Was bringen kommunale Gebietsreformen?: Kausale Evidenz zu Hoffnungen, Risiken und alternativen Instrumenten," Perspektiven der Wirtschaftspolitik, De Gruyter, vol. 18(4), pages 307-324, November.
    3. Xenia Frei & Felix Rösel, 2018. "Mini-Brexit in Bayern – Bringt mehr kommunale Autonomie mehr Wachstum?," ifo Dresden berichtet, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 25(04), pages 25-27, August.
    4. Yu Liu & Zhuorui Yu & Daining Liu & Hao Zhang & Long Zhou & Guoqiang Shen & Chasong Zhu & Yiheng Sun & Yanran Wang, 2022. "Triple Spatial Effects of the Administrative Hierarchy on Urban Built-Up Areas in Fujian Province, China: Heterogeneity, Radiation, and Segmentation," Land, MDPI, vol. 11(12), pages 1-24, December.
    5. Mona Förtsch & Selina Schulze Spüntrup, 2023. "Sachsens Städte und ihre Verflechtungsräume," ifo Dresden berichtet, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 30(02), pages 08-14, April.

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    More about this item

    Keywords

    Urban Economic Growth; Centrality; Institutions; Public Sector; East Germany; Post-socialist Cities; Capital Cities; County Towns; County Government Reform;
    All these keywords.

    JEL classification:

    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • R5 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis
    • P2 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies
    • H1 - Public Economics - - Structure and Scope of Government
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations

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