Urban Growth in Germany – The Impact of Localization and Urbanization Economies
Christoph Hornych, Michael Schwartz, Annette Illy, Martin T. W. Rosenfeld
IWH Discussion Papers,
No. 19,
2009
Abstract
This study examines the impact of localization and urbanization economies as well as the impact of city size on urban growth in German cities from 2003 to 2007. Although, from a theoretical perspective, agglomeration economies are supposed to have positive impacts on regional growth, prior empirical studies do not show consistent results. Especially little is known about agglomeration economies in Germany, where interregional support policy and the characteristics of the federal system are further determinants of urban growth. The results of the econometric analysis show a U-shaped relationship between specialization and urban growth, which particularly holds for manufacturing industries. We do not find evidence for the impact of Jacobs-externalities; however, city size shows a positive (but decreasing) effect on urban growth.
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The Standing of the East German Cities within the German System of Cities: An Interim Review on the Basis of Economic Indicators 20 Years after the German Unification
Peter Franz
Wirtschaft im Wandel,
20 Jahre Deutsche Einheit - Teil 1 -
2009
Abstract
The hopes of the East German citizens coupled with the unification in 1990 were not only directed to their personal fortune, but also concerned the amelioration of the living conditions in their cities. Twenty years after this date, we can strike an interim balance how far these hopes have been become true. For this purpose, the thirteen largest East German cities (without Berlin) are compared to cities of similar size in three West German regions (South, North, Center represented by North Rhine/Westphalia). The indicators chosen rely to the cities’ economic and fiscal conditions. The indicators paint a differentiated picture: The average income per capita in the East German cities is still lower than in the West German cities and unemployment rates are still above the West German level. With respect to future growth potential, the East German cities show a relatively good endowment with qualified human capital, with public universities and research institutions. In contrast to that, the small size of the firms and the small number of firm headquarters are unfavourable for a dynamic growth in the future. Another persistent difference between East and West is the low level of public revenues, which keeps the East German cities dependent on Federal grants. The city officials were successful in cutting payroll costs and reducing the number of civil servants. In spite of the diverse depicted economic problems still to be solved, the East German cities over the years have shown impressive endurance in catching-up.
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Finanzierung kommunaler Aufgaben: Ökonomische Prinzipien, moderne Herausforderungen und institutionelle Gestaltungsmöglichkeiten
Martin T. W. Rosenfeld
Position Liberal, Bd. 88,
2009
Abstract
The publication is based on the economic principles for an efficient local public revenue system. The main part of the publication is examining the question how different categories of revenues (taxes, user fees, grants-in-aid) and different arrangements of these revenues are able to meet with these principles. In addition, it is asked for the implications of recent developments (demographic change; increasing importance of the competitiveness of cities) for the choice between different categories of revenues. Finally, it is discussed how it could be possible in countries like Germany – where the existing local public revenue system is quite far away from what is regarded as efficient – to come to an institutional change in the direction of a better way of financing the local level.
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Knowledge City Berlin? Potenziale und Risiken einer Stadtentwicklungsstrategie mit dem Fokus Wissenschaft
Peter Franz
Das Wissen der Städte. Neue stadtregionale Wissensdynamiken im Kontext von Wissen, Milieus und Governance,
2009
Abstract
In this chapter the author applies his own „knowledge city“ approach (Franz 2007) to the German capital city of Berlin. After examining the quality profile of the universities located at Berlin the author analyses diverse strategic steps in support of a sharpened scientific profile having already been put into action by managers being responsible for science policy in Berlin.
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Ende der 'Gemischtwarenläden': Spezialisierung von Technologie- und Gründerzentren als Option kommunaler Wirtschaftsförderung
Michael Schwartz, Christoph Hornych
List Forum für Wirtschafts- und Finanzpolitik,
2009
Abstract
In the context of policy measures that focus on the promotion of entrepreneurship and innovative start-ups on the level of cities and municipalities, since the beginning of the 21st century, there is an explicit tendency to establish a new type of business incubators and technology centers. These support facilities focus their support infrastructure and processes on firms from one specific sector and its particular needs. In Germany, since 1999, nearly one-third of all new business incubators opened with a sector-specific focus. Despite the continuously increasing importance of such specialized business incubators in local and regional development strategies, there is no analysis of these support facilities. On the basis of the key principles of business incubation functionality, supplemented by recent findings of incubator/ incubation research, this article investigates the evolution of this incubator concept in Germany, its regional distribution and describes the benefits to firms of being part of a specialized incubator. Moreover, this article details what are the general conditions and requirements for the long-term success of specialized business incubation initiatives.
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Keeping the Bubble Alive! The Effects of Urban Renewal and Demolition Subsidies in the East German Housing Market
Dominik Weiß
IWH Discussion Papers,
No. 11,
2009
Abstract
German urban renewal programs are favoring the cities in the Eastern part since the re-unification in 1990. This was accompanied additionally by attractive tax incentives, designed as an accelerated declining balance method of depreciation for housing investments during the late 1990s. The accumulated needs for comfortable housing after 40 years of a disastrous housing policy of the GDR era were generally accepted as justification for the subvention policy. But various subsidies and tax incentives caused a construction boom, false allocations, and a price bubble in Eastern Germany. After recognizing that the expansion of housing supply was not in line with the demographic development and that high vacancy rates were jeopardizing housing companies and their financial backers, policy changed in 2001. Up to now, the government provides demolition grants to reduce the vast oversupply. By means of a real option approach, it is ex-plained how different available forms of subsidies and economic incentives for landlords lift real estate values. The option value representing growth expectations and opportunities is calculated as an observable market value less an estimated fundamental value. Empirical results disclose higher option premiums for cities in Eastern Germany and a strong correlation of the option premium with urban renewal spending.
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Are Public Debts of the German Federal States Influencing their Financial Scope?
Sabine Freye
IWH Discussion Papers,
No. 12,
2009
Abstract
The German Federal States have little impact on their budget. Both, revenues and ex-penditures, are basically determined by federal and European law. For a long time, this situation has been causing increasing debts. Today, public debts are again a top issue. The planned federal “debt brake” includes a gradual reduction and an interdiction of structural debts as from 2020. In a short perspective, this means an additional financial limitation to the public budgets. With regard to the described situation, the main question of this paper is: Do the German states actually have financial scope to realize the implementation of the planned “debt brake”? The analyses show that the financial scope for reducing their structural debts is particularly small in the five Federal States benefitting from additional transfers as from 2010. The highest budget restrictions do show the city states Berlin and Bremen.
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Possible Ways for Developing a Media City: Chances for Newcomer Cities are rather Limited!
Christoph Hornych, Martin T. W. Rosenfeld, Michael Schwartz
Wirtschaft im Wandel,
No. 5,
2009
Abstract
Numerous cities try to set up themselves as centres of creative businesses, especially for media industry. Behind such strategies for supporting the local media economy stands the aim to profit from the high share of supra-regional sales in the media economy, from possible image effects as well as – especially in Germany – from the backflow of taxes for public broadcasting. Against this background, the article examines the efficiency of possible instruments for local decision makers to improve the location conditions for the media industry. An analysis of the location preferences of the media industry shows that localization economies as well as urbanization economies have a high importance. Economic measures to generate or strengthen these effects are the attraction of public broadcasting stations, the assignment of subsidies for local film and media producers, the endowment with science facilities and educational institutions which are relevant for media, the establishment of business incubators specialized on media industry, and the development of inter-firm networks and special city districts for the local media industry. Our analysis shows that most of these instruments have only limited impacts. In particular, cities without public broadcasting stations and without educational institutions relevant for the branch probably will not have the chance to become media cities.
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Municipal Enterprises as Shadow Budgets – How do they Affect the Actual Budgetary Situation of Germany´s Local Governments?
Peter Haug
Wirtschaft im Wandel,
No. 5,
2009
Abstract
Outsourcing of municipal tasks from the core budget to municipal enterprises tends to distort the perception of the actual financial position, net assets and results of operations of the German local governments. Excess supply or -demand of/for local public services might be possible consequences of this development. Hence, this article attempts to develop a more comprehensive picture of the municipal budgetary position by a simultaneous analysis of selected indicators. Furthermore, the methodological problems of the calculations are illustrated.
If these shadow budgets are taken into account, the total per capita revenues, -investments and -debts will increase by approximately one third to 50%. However, the share of the municipal employees belonging to the core administration in the total number of municipal employees is 75%. Although only about 22% of the expenditures for certain voluntary municipal tasks have been outsourced, there seems to be an upward trend.
The study also indicates that there are significant differences between Eastern and Western German cities. These include the higher revenues from municipal enterprises, the higher debts per capita and the higher expenditures on culture, sports, leisure services or the promotion of science in Eastern Germany.
The results should be interpreted carefully due to some shortcomings of the official statistics. For example, internal cash flows cannot be totally eliminated. Moreover, indirect municipal majority holdings as well as the municipal savings banks are not included in the results.
All in all, it remains to be seen whether the initiated reforms concerning the introduction of double-entry accounting into the local government budgeting system will help to achieve the ideal goal of a meaningful “consolidated financial statement” for the “city company”.
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Neue Ansätze für Wachstumsstrategien der Wirtschaftsförderung in deindustrialisierten Städten
Peter Franz
Regenerierung der Städte. Strategien der Politik und Planung im Schrumpfungskontext,
2009
Abstract
Im Zentrum des Beitrags steht die vergleichende Diskussion verschiedener Ansätze, welche Strategien zur Regenerierung von Städten enthalten, die sich im wirtschaftlichen Niedergang befinden. Dazu zählen die Drei-Sektoren-Hypothese in Anlehnung an Fourastié, die Theorie des Produktlebenszyklus, die Hypothese von Entwicklungsvorteilen der skilled city und verschiedene Hypothesen in Verbindung mit der Diskussion zum wirtschaftlichen und demographischen Wiederaufstieg von Städten (resurgent cities). Diese Ansätze werden auf die Situation der ostdeutschen Städte bezogen und mit verschiedenen empirischen Befunden konfrontiert, die Indizien zu wirtschaftlichen Entwicklungstrends ostdeutscher Städte enthalten. Ein vergleichendes Resümee schließt den Beitrag ab
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