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Urban Shrinkage in Eastern Germany


  • Florian W. Bartholomae
  • Chang Woon Nam


  • Alina Schoenberg


This paper questions the widely applied parallelism of demographic and economic development in characterizing urban shrinkage in Germany, and argues that the usage of population change as a single indicator leads to incorrect policy recommendations for combating urban shrinkage. As the cases of several Ruhr cities (Essen, Gelsenkirchen and Dortmund) and East German cities (Erfurt, Rostock and Magdeburg) prove, urban economic growth can also be achieved thanks to the substantial presence of modern industries and business services, and despite declines in population size. The serious shrinkage of Halle, Cottbus and Schwerin is primarily due to failures in the post-industrial transformation process. Recent policy measures strongly oriented towards slowing the downsizing process of population (via urban regeneration measures to hinder suburbanisation and low core urban density) do not address this major problem effectively. More active industrial policy measures are required in these East German shrinking cities to create a competitive manufacturing sector (endowed with new high-tech firms) and to boost its growth interdependence with modern local services.

Suggested Citation

  • Florian W. Bartholomae & Chang Woon Nam & Alina Schoenberg, 2015. "Urban Shrinkage in Eastern Germany," CESifo Working Paper Series 5200, CESifo.
  • Handle: RePEc:ces:ceswps:_5200

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    References listed on IDEAS

    1. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416-416.
    2. Cristina Martinez‐Fernandez & Ivonne Audirac & Sylvie Fol & Emmanuèle Cunningham‐Sabot, 2012. "Shrinking Cities: Urban Challenges of Globalization," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 36(2), pages 213-225, March.
    3. Peter Friedrich & Chang Woon Nam, 2011. "Innovation-Oriented Land-Use Policy At The Sub-National Level: Case Study Germany," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 84, Faculty of Economics and Business Administration, University of Tartu (Estonia).
    4. Thorsten Wiechmann & Karina M. Pallagst, 2012. "Urban shrinkage in Germany and the USA: A Comparison of Transformation Patterns and Local Strategies," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 36(2), pages 261-280, March.
    5. Michael Berlemann & Jan-Erik Wesselhöft, 2012. "Total Factor Productivity in German Regions," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(02), pages 58-65, July.
    6. Birgit Glock & Hartmut Häussermann, 2004. "New trends in urban development and public policy in eastern Germany: dealing with the vacant housing problem at the local level," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 28(4), pages 919-929, December.
    7. Franz-Josef Bade & Alexander Eickelpasch, 2011. "Fördermittel für strukturschwache Gebiete: die erfolgreiche 26-Milliarden-Euro-Subvention," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 78(5), pages 2-9.
    8. Andy Pike & Andres Rodriguez-Pose & John Tomaney, 2007. "What Kind of Local and Regional Development and for Whom?," Regional Studies, Taylor & Francis Journals, vol. 41(9), pages 1253-1269.
    9. Michael Berlemann & Vera Jahn, 2014. "Relative Innovative Capacity of German Regions: Is East Germany Still Lagging Behind?," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 14(04), pages 42-50, January.
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    Cited by:

    1. Tom Hudepohl & Ryan van Lamoen & Nander de Vette, 2019. "Quantitative easing and exuberance in stock markets: Evidence from the euro area," DNB Working Papers 660, Netherlands Central Bank, Research Department.
    2. Kauffmann, Albrecht, 2015. "Wie lässt sich die Bevölkerungsentwicklung von Städten korrekt ermitteln? Eine Methode zur Bereinigung amtlicher Daten um die Effekte von Gebietsänderungen am Beispiel von Ostdeutschland," IWH Online 5/2015, Halle Institute for Economic Research (IWH).

    More about this item


    urban shrinkage; East Germany; post-industrial transformation; parallelism of demographic and economic development; smart growth; modern industries and services;

    JEL classification:

    • P25 - Economic Systems - - Socialist Systems and Transition Economies - - - Urban, Rural, and Regional Economics
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • H76 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other Expenditure Categories


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