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

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

Abstract

Public sector activities are often neglected in the economic approaches used to analyze the driving forces behind urban growth. The institutional status of a regional capital is a crucial aspect of public sector activities. This paper reports on a quasi-natural experiment on county towns in East Germany. Since 1990, cities in East Germany have demonstrated remarkable differences in population development. During this same period, many towns have lost their status as a county seat due to several administrative reforms. Using a difference-in-difference approach, the annual population development of former county capitals is compared to population change in towns that have successfully held on to their capital status throughout the observed period. The estimations show that maintaining county capital status has a statistically significant positive effect on annual changes in population. This effect is furthermore increasing over time after the implementation of the respective reforms.

Suggested Citation

  • Heider, Bastian & Kauffmann, Albrecht & Rosenfeld, Martin T. W., 2016. "Does administrative status matter for urban growth? Evidence from present and former county capitals in East Germany," IWH Discussion Papers 24/2016, Halle Institute for Economic Research (IWH), revised 2016.
    • Handle: RePEc:zbw:iwhdps:242016
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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:

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

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