Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/147004
Authors: 
Heider, Bastian
Kauffmann, Albrecht
Rosenfeld, Martin T. W.
Year of Publication: 
2016
Series/Report no.: 
IWH Discussion Papers 24/2016
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.
Subjects: 
urban economic growth
centrality
institutions
public sector
East Germany
post-socialist cities
capital cities
county towns
county government reform
JEL: 
H1
H7
P2
R1
R5
Document Type: 
Working Paper

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