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The Political Geography of Cities

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  • Bluhm, Richard
  • Lessmann, Christian
  • Schaudt, Paul
Abstract
We study the link between subnational capital cities and urban development using a global data set of hundreds of first-order administrative and capital city reforms from 1987 until 2018. We show that gaining subnational capital status has a sizable effect on city growth in the medium run. We provide new evidence that the effect of these reforms depends on locational fundamentals, such as market access, and that the effect is greater in countries where urbanization and industrialization occurred later. Consistent with both an influx of public investments and a private response of individuals and firms, we document that urban built-up, population, foreign aid, infrastructure, and foreign direct investment in several sectors increase once cities become subnational capitals.

Suggested Citation

  • Bluhm, Richard & Lessmann, Christian & Schaudt, Paul, 2021. "The Political Geography of Cities," Economics Working Paper Series 2111, University of St. Gallen, School of Economics and Political Science.
    • Handle: RePEc:usg:econwp:2021:11
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    1. Roesel Felix, 2023. "The German Local Population Database (GPOP), 1871 to 2019," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 243(3-4), pages 415-430, June.
    2. Smith, Cory B. & Kulka, Amrita, 2024. "When is Long-run Agglomeration Possible? Evidence from County Seat Wars," 2024 Annual Meeting, July 28-30, New Orleans, LA 343859, Agricultural and Applied Economics Association.

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    More about this item

    Keywords

    Capital cities; administrative reforms; economic geography; primacy;
    All these keywords.

    JEL classification:

    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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