How Government Cares for Urban Economic Growth: the Impact of Different Fiscal Grant Schedules in the German Federal States on the Development of Urban Areas

In recent years, in the public discussion on (regional) economic policy, the importance of urban districts or cities for regional and for national economic growth has been strongly emphasized. It is an usual assumption that agglomeration economies may be found inside urban areas. For making best use of agglomeration economies, there have been proposals for changing the traditional scheme of regional policy from an orientation on "interregional equalization“ and "aid" for the regions lagging behind“ towards support for the strongest“ and "stimulating economic growth conditions in urban areas“. The paper has the intention to bring more light into the question how a country’s government could efficiently support the economic conditions in larger cities or urban areas. There are of course several instruments for this. One quite common instrument in most countries are the Systems for Local Fiscal Equalization (LFE), by which the national (federal) government or the states (within federations) are allocating different categories of grants in aid to the local level of government. As the LFE-systems differ strongly not only between different countries, but also between the states within a country, it seems necessary to focus on some countries or even on some states within a country. As a first approach to analyse the existing LFE-rules, this paper is concentrating on the conditions in six selected German states. For this sample, the paper is analyzing the current fiscal position of urban areas within the federal states (or Lander) of Germany and is trying to give some first answers to the following questions: Do some states care more than other states for urban areas? What is the institutional setting for spending state money for urban areas: Are the grants per capita higher for the more agglomerated urban areas? Have the grants the potential to stimulate ur¬ban growth – or are they supporting public functions without positive impacts on the economy? How are the urban centres compensated for their function as central places? The analysis is done on the basis of the states‘ rules on LFE, in the sense of an ex-ante evaluation of these rules, by classifying the rules according to their incidence (in favor or against urban centers). It is shown that there are quite different ways for a state to allocate grants in favour of the cities. There is an enormous lack of transparency in the LFE-systems of all states in the sample. The impression is that the LFE-rules are not trying, so far, to support the cities and their eco¬no¬mic performance consistently. In some states, shrinking cities and cities with special problems (e. g. with a high number of welfare recipients) could be to some extent even in a better fiscal position than cities with economic growth and growth potentials.

Classification of labour markets in the Silesian Province (Poland)

The purpose of this article is to try to classify labour markets of the Silesian Province on the municipality level. The proposed solution of grouping labour markets is based on three criteria: the size of the labour market measured by a number of jobs, the weight of the labour market expressed with a proportion of the number of jobs to the size of the population and that scale of the impact that is a proportion of the commuters to the ones leaving for work. As a result of the assumed criteria the municipalities have been grouped according to their meaning on the labour market, at the same time identifying weaker and stronger labour markets. The first stage of the research was to divide the municipal labour markets according to the number of the employed. As a result territorial units were grouped into 4 classes (small, medium, big and huge) including in total 9 subclasses. Then the municipal labour markets were sorted according to their weight and the scale of their impact, verifying their position in this way. The research pointed out that a lot of labour markets in the Katowice conurbation showed lower levels than the assumptions. Consequently, it suggests polarization of the labour market of this urban unit that is mainly focused on Katowice and Gliwice. Higher parameters than the assumed ones were reached by several municipalities that are small or medium labour markets. In many cases these are municipalities where there are huge businesses connected with coal mining. A beneficial situation was noted in the southern part of the province that has a relatively steady situation on the labour market. The presented classification of labour markets can support the management process of local and regional development

The Pattern of Spatially Concentrated Industries in East Germany - A Contribution to the Discussion on Economic “Clusters“

Throughout the literature in regional economics, most authors agree that spatially concentrated industrial activities are important for regional economic growth. Agglomeration economies, which may occur in the context of spatial concentration and “clusters“, may lead to lower costs of production and may reduce transaction costs of all kind, e. g. information costs, including the costs for R&D activities. There is much less agreement on (and: knowledge about) the empirical identification of existing spatially concentrated economic activities in the real world. For the last decade, the discussion on spatial concentration has been dominated by praising the benefits of economic “clusters“. Many case studies on regions with economic “clusters“ are describing how the mechanisms of these specific “clusters“ work. But there have been only a few attempts, so far, to look at a greater region or even at an economy as a whole, in order to find out – with empirical data which allow to compare between the sub-regions – for all sub-regions what their specific „competences“ in the field of spatially concentrated industrial activities are and whether there is a typical spatial pattern of concentrated industrial activities. The proposed paper is presenting the empirical results of a study on spatially concentrated industries in the Eastern part of Germany, where the current regional policy scheme, which de facto follows the “watering can principle”, is under debate. In the first part of the paper, the possible dimensions and the “ingredients” of economic “clusters“ and industrial agglomerations will be discussed. One important dimension is the existence of intra-regional value-added chains for certain products. But, at the moment, it is not possible to identify such value-added chains by using existing empirical data at the more aggregated levels of an economy. Therefore, our study and the paper are concentrating on just three main dimensions of economic “clusters” and industrial agglomerations: (1.) Particular high spatial concentrations of certain industries are identified (based on employment data by NACE 2 digit level) for all East German counties. (2.) The existence of business networks (and their main characteristics, e. g. industry classification) in the East German regions is discovered by a broad exploration of internet sources and an inquiry among regional development agencies. (3.) Spatially concentrated innovation activities are recorded for each region by using data on patent applications (by IPC classes). It will be discussed in the paper what is implicated with these three dimensions and their operationalization with empirical data. Finally, the findings from the first three steps of research are synthesized for showing how sectoral concentration, business networking and innovation competencies in the individual regions are overlapping. The findings reveal that spatially concentrated industries are mainly located in and around the largest East German cities in Saxony and Thuringia, and in Berlin and its hinterland. In contrast, a number of less densely populated, rural or former industrialized areas in the northern and central parts of East Germany have no or only some elements of spatially concentrated industries. The presented method for identifying spatially concentrated industries could be applied to other regions and economies for bringing more light into the debate on economic “clusters“. With regard to regional policy in East Germany, one may conclude from our findings that the present use of the “watering can principle” had not been able to stimulate economic agglomerations in economically weak peripheral regions. It could be a better strategy to support the existing “clusters” and industrial agglomerations.

Inventing a Capitalist Region: Upper Silesia/Poland - Economic Transformations in Old-Industrial and Post-Socialist Spaces of Central and Eastern Europe

The thesis explores economic, political and social processes in former socialist countries with a case study in one of the biggest conurbations in Europe, Upper Silesia. The ongoing but selective economic processes of global and macro-regional economic integration have been identified as a main issue in geographical research. In particular the nexus between the global and the local seen as a dialectical relationship, composed of multiple and asymmetric interdependencies has stressed the necessity of utilising relational analysis in economic geography. The question emerges in what ways and to what extent increasing economic integration may lead to a socio-economic convergence of places or the development of 'indigenous capacities', spatial peculiarities and legacies to establish themselves in capitalist networks of production. With empirical reference to the Polish conurbation of Upper Silesia and drawing on the analytical framework from Michael Storper's 'Holy Trinity' ("The Regional World", New York, 1997), this thesis analyses post socialist urban and regional transformations from three angles. 1. While Storper analysed mainly 'successful' regions in the West, the research tries to identify the main challenges that face any simple attempt to adapt western (theoretical) approaches within a post-socialist, Central East European context. 2. The thesis then identifies the fabric of political economic actors and the path dependent 'invention' of a region, here Upper Silesia, and analysis locally and regionally embedded and recombined informal institutions and their capacity for restructuring of an old industrial space. 3. While inter- and intra-regional competition is growing in an 'era of globalisation', the thesis finally investigates the scope for action and 'reflexive' interrelations between administrative, political and economic actors in an 'ordinary region' prior to the accession to the European Union

Why and how central Europe's largest logistics complex developed on a brownfield site

The aim of the article is to explain the dependence on key factors and development path in the expansion process of the largest Central European logistics complex situated on postmining brownfield. Here, a highly original example is the city of Sosnowiec in the Katowice conurbation (Poland). In the article, the development of this complex and its model of spatial diffusion, with an indication of both facilitating and restricting aspects of its further expansion is discussed. The following issues are also brought to light: spatial location, urban policy, transport accessibility and local labour market. In the article, the development of this complex is discussed according to model of spatial diffusion

Foreign trade of Poland between 1918-1939, with special reference to the trade with Britain

The principal aims of Poland's foreign trade policy were twofold : I/ the economic structural aim - the industrialisation of the country as the result of agricultural overpopulation, 2/ the economic and political aim - the economic independence from Germany.The industrialisation of the country had to solve the problem of the agricultural overpopulation, as the emigration and the agrarian reform were only fragmentary and temporary solution?.In 192I the population of Poland numbered circa 27.2 mill., while in I939 circa 35 mill.The hidden structural unemployment was estimated at 5-7 mill.Poland,la.cking several essential raw materials as Iran ore, semi -base metals, cotton as well as having only a small output of machinery had to rely to a large extent on imports in her industrial expansion. The industrialisation was to be achieved by importing as many means of production as possible and by providing the industries with raw materials. This could be done : I/ by expanding imports in the way of increased exports and foreign credits, these latter being a temporary measure only.2/ By using the available foreign exchange for imports as much as possible for industrialisation purposes i.e. by influ. encing properly the structure of imports.3/ By developing export not only numerically but also by quality shifting them from raw materials to more elaborately transformed goods and thus increasing the employment home.4/ Bar reducing the invisible imports as shipping services, costs of middlemen in foreign trade etc.The second aim - the economic independence from Germany was created by Germany herself. The export embargo on the engineering products in first few post -war years, designed to make impossible Poland's reconstruction,then the German effort in 1925 to gain a trade monopoly inn Poland's market by the means of black mail With closing coal imports from Polish Upper Silesia - simply forced Poland to fight for her life.This economic struggle with Germany caused Poland to replace her export and import markets.It resulted partially in the development of national industries, partially shifting foreign trade to other countries. The basis of these latter means were the relations with Great Britain and the British Empire.In the light of to -day's experiences,hopes and difficulties it seems necessary to draw the following conclusions from this recently past period:1 /.It is dangerous for the economic stability and development of the country to finance the reconstruction work by means of private credits, liable to the withdrawal at the private initiative at a short notice.The burden of the so- financed reconstruction hampered Poland's economic development and her foreign trade during almost all the inter-war period.2 /.The volume of the foreign trade was to a very large extent dependant on factors, outside the sovereign will of the economically weaker States.The best efforts of their government and citizens together could not counter -act the influence of these factors,being the resultant of international clashes of economic forces.Thus the freedom of action in the field of foreign trade was for Poland very restricted.But at the same time the results achieved prove the value of such even restricted independence.This actual limitation as well as the efficiency of the national foreign trade in profiting from even the restricted scope of action in the past period are often overlooked.They both ought to be taken into account by partisans and critics of the idea of a planned organization of the world trade.3 /.The lack of development of trade relations between Poland and France notwithstanding reciprocal efforts proves that the political alliance and good will from both sides are not sufficient to foster trade relations without a real structural background.4 /.As regards Polish- British trade - the experiences of the past period proved that beside the complementary character of the trade of both countries,the good quality of British goods and willingness to buy them - the reciprocal knowledge of the market conditions, in the full meaning of this word, and their practical application are an essential factor for the development of the trade relations between the two countries

Mapping regional vulnerability in Europe’s energy transition: development and application of an indicator to assess declining employment in four carbon-intensive industries

Europe’s transition to an energy system compatible with limiting global heating to 1.5 °C will require radical changes in energy systems. While this will create substantial new growth industries in clean technologies, some currently important economic activities will decline. The impacts of that transition will not be the same for all regions. We map the economic vulnerability of European regions to ambitious decarbonisation scenarios in terms of employment losses in four carbon-intensive industries. To do so, we develop a composite vulnerability indicator that combines each region’s share of employment in those high-carbon industries with other dimensions of vulnerability and resilience. We then explore how regional patterns of vulnerability are influenced by the technology pathway to 2050, using four scenarios modelled using the European PRIMES model. We show that economic vulnerability to the low-carbon transition is regionally concentrated, with some regions combining high employment shares in industries expected to decline with weak adaptive capacity and high pre-existing unemployment. We also show that there is little variation in regional vulnerability arising from different transition pathways. All scenarios compatible with 1.5 °C involve large declines in all high-carbon sectors we analyse, and as a result, scenario variation does not lead to large variation in relative vulnerability of regions. The results highlight regions that may be in need of additional policy support to diversify their economies and achieve a just transition

From Marshallian District to Local Productive Systems: The Polish Case

The chapter concentrates on the positive development dynamics of "industrial districts" based on the network of Small an Medium-Sized firms in Poland.The crux of the matter is to establish whether or not industrial districts constitute a model for the regenaration of local and regional economies in Central European Countries