53rd Congress of the European Regional Science Association: "Regional Integration: Europe, the Mediterranean and the World Economy", 27-31 August 2013, Palermo, Italy
The city of Brussels has a unique position in Europe. It is not only the capital city of the European Union, it also the capital of federal state of Belgium, of its two different language communities and of the government of the Brussels region. Independent of this, the city itself is composed of 19 communes with a (by comparison in Europe) large degree of independence from the central authority. The intertwining of different public institutions and the sheer complexity of those institutions make it difficult to identify single policies performed in Brussels as well as the competences of the public actors. The present paper treats a city, much like the city of Brussels, and its border region as an urban employment center, shared by two language groups. Both groups commute to the city center and share a space in the urban labor market. We treat the locational preference of households in and around this city, taking into account the preference of each language group for public facilities in their native language. We first derive a first-best optimum for the whole city and derive the locational equilibrium of both groups. This is considered both with and without moving costs. Then we consider restrictions to the availability of public facilities for each group, dependent on political restrictions or local regional preferences. In a last section, we consider the impact of transport infrastructure, a numeric overweight of one group and elaborate more on possible impacts of migration and agglomeration effects within the city. Innovative elements in the model are the treatment of the language groups and its implementation in the urban model. The paper treats how this can be introduced in an applied model for Brussels and gives directions for future work.