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Varieties of Capital Cities

The Competitiveness Challenge for Secondary Capitals

David Kaufmann

The political and symbolic centrality of capital cities has been challenged by increasing economic globalization. This is especially true of secondary capital cities; capital cities which, while being the seat of national political power, are not the primary economic city of their nation state. David Kaufmann examines the unique challenges that these cities face entering globalised, inter-urban competition while not possessing a competitive political economy.
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Chapter 8: Comparing locational policies in Secondary Capital Cities

David Kaufmann

Extract

This chapter systematically compares the findings of the four case studies. The findings can be summarized as two core types of locational policies agendas. The first is geared towards the physical development of the city and the attraction of public funds. It can empirically be found in Ottawa and The Hague. The second locational policies agenda is geared towards maximizing tax revenues, and it is predominant in Bern and Washington, DC. The emergence of these two different locational policies agendas can be explained by four factors, namely local tax autonomy, the development stage of the Regional Innovation System, capital city specific constraints and vertical institutional fragmentation in combination with local tax autonomy. The degree of local tax autonomy is the best predictor of locational policies as it sets up the structures under which cities can raise funds. Thus, institutions seem to matter when explaining the variance of urban policies.

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