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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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Index

David Kaufmann

Abrams, Philip 18
acquisitions 256
in Bern 634
of firms 16770
in The Hague 11921
in Ottawa 912
in Secondary Capital Cities (SCCs) 256, 16770
strategies 16770
in Washington, DC 15052
actor-centered institutionalism 1415, 17
Administrative Consultations for Economic Affairs 185
agency-based explanations 17
agency in formulation of locational policies 181
Amsterdam 101
analytical framework 4, 15, 17
for locational policies 20
rationale of 14
theory of 1415
Andeweg, Rudy 10910
Andrew, Caroline 81
autonomy
local 245, 345, 412
tax see tax autonomy
Barry, Marion 130
BEDA see Bern Economic Development Agency (BEDA)
Berlin 10
Bern 516
acquisition of firms in 634
agglomeration of 44, 51, 54, 62, 645
business prerequisites 613
canton of 634
case selection of 44
cities for political gatherings to 47
cluster policies in 578
compensation payments 679
coordination 647
diffusion subsystem 51
economic advancement of 55
economic and political importance of 59
economic development agencies 71, 161
economy 64
entrepreneurial ecosystems 58
exploitation subsystem 4950
fiscal setting in 61
geography of 478
history of 467
horizontal dimension 545
image building 6061
innovation policies 567, 5960
institutional fragmentation and tax autonomy 66
international competitiveness of 71
knowledge application 4950
knowledge-based firms 50
knowledge-generation 51
knowledge infrastructure 59
local revenue composition 53
local tax autonomy 412
locational policies in 56, 6972
multilevel governance setting 516
policies to stimulate entrepreneurial ecosystems 58
population of 478
public funds 679
quality-of-life policies 63
regional innovation system (RIS) 4951, 163
Swiss ICT cluster in 50
tax competition in 172
urban governance arrangement 55
urban governance dimension 556
vertical dimension 513
Bern Economic Development Agency (BEDA) 56, 57, 64
BIDs see Business Improvement Districts (BIDs)
Big, Open and Linked Data (BOLD) 11516
BOLD see Big, Open and Linked Data (BOLD)
Bradford, Neil 162
bureaucracy, culture of 30
Business Improvement Districts (BIDs) 141
business prerequisites 245
in Bern 613
characteristics of 167
explaining 166
in The Hague 11819
locational policies in 1657
in Ottawa 9091
in Secondary Capital Cities (SCCs) 245
in Washington, DC 14750
Canada economic development in 79
English-speaking parts of 734
jobs in 77
MLG setting 789
population dynamics in 75
public administration of 76
taxes of 7980
cantonal-level equalization scheme 53
capital circulation 19
capital cities
Bern see Bern categorizations of 6
constitutional status of 34
European body of 10
The Hague see The Hague local governments of 35
Ottawa see Ottawa political economy of 10
types of 5
Washington, DC see Washington, DC
see also Secondary Capital Cities (SCCs); specific cities
capital funds 144
Capital Region Switzerland (CRS) 58, 65, 67
establishment of 60
political orientation 60
regional coordination structure 60
Capital Region Switzerland association 56
causal mechanisms, Secondary Capital Cities (SCCs) 1718
CEDO see Commission of Economic Development Officials (CEDO)
Chinese foreign direct investment (FDI) 146
cities studies
horizontal nesting of 33
selection of 41, 44
summary of 423
vertical nesting of 323
Clinton, Bill 130
cluster-building 30
cluster policies 578
in Bern 578
The Hague 11114
in Ottawa 867
in Washington, DC 1434
clusters
development in cyber security 11314
of international organizations 111
policies in 11314
strategies 22
coalition agreement 111
Commission of Economic Development Officials (CEDO) 152
compensation payments 289
of Bern 679
explaining 174
of The Hague 1234
of Ottawa 946, 174
of Secondary Capital Cities (SCCs) 289
of Washington, DC 1546
consociationalism 10910, 183
construct validity 202
coordination of locational policies 268
in Bern 647
explaining 170
in The Hague 1213
in Ottawa 924
in Secondary Capital Cities (SCCs) 268, 17073
in Washington, DC 1524
corporatism 10910, 183
creative class 150
CRS see Capital Region Switzerland (CRS)
cyber intelligence 134
cyber security 104, 114, 11718, 134
decision-makers 60, 101
development and public funds 178, 179
development-oriented locational policies 186
District of Columbia Self-Government and Governmental Reorganization Act 130
Doloreux, David 81
Dutch governance system 10910
Dutch policy-making 111, 183
Dutch political system 110
dynamic analytical framework 38, 39
dynamic economic sectors 164
EAB’s ‘Strategy 2020’ 6061
Economic Area Bern 56
economic development
plans 84, 85
policies 16
economic globalization 2, 10, 1516
economic institutions 3, 14, 16, 177, 192
employment 134
‘enabling/constraining’ causal mechanism 14, 17
entrepreneurial ecosystems
in Bern 58
in The Hague 11415
in Ottawa 87
Etzkowitz, Henry 162
European Regional Development Fund 28
European Union (EU) funds 28
exchange-value of property 185
ex-imperial capitals 6
exploitation subsystem 29, 4950
external validity 202
federal capitals 9, 34
autonomy of 10
Federal Criminal Court 46
federal government 46, 50, 52, 58, 62, 769
encroachment of 129
financial incentives 171
fiscal equalization scheme 523
Five Year Economic Development Strategy 142
Focus Bern 55
former capitals 6
gentrification 150
geography
of Bern 478
of The Hague 102
of Ottawa 756
of Washington, DC 13032
GGBa see Greater Geneva Berne Area (GGBa)
Giddens, Anthony 18
global capitals 6
global economic powerhouses 2
global economy 2
globalization 12, 16
economic restructuring forces of 23
rise of 5
theories of 2
globalized economy 16
Gottmann, Jean 5
Grant, Ulysses S. 129
Greater Geneva Berne Area (GGBa) 64
Greater Washington Board of Trade (GWBoT) 141
Gréber, Jaques 74
growth machine 367, 141, 184, 193
GWBoT see Greater Washington Board of Trade (GWBoT)
The Hague 9, 41, 100
acquisition of firms 11921
agenda of locational policies 125, 126
business prerequisites 11819
case selection of 44
clusters policies 11114
coordination 1213
cyber security 11718
decentralization of unemployment 112
development in cyber security 11314
diffusion subsystem 1067
entrepreneurial ecosystems 11415
finance cluster 106
geography of 102
governmental economic development funds 176
history of 100102
horizontal dimension 109
image building 11718
innovation policies 11217
international organizations 101, 106, 117, 111
International Zone 111
knowledge-generation 1067
knowledge infrastructure 11516
local revenue composition 109
locational policies 11112, 1247
map of 110
multilevel governance setting 10711
Municipal Department of International Affairs 120
oil and gas cluster 106
Permanent Court of Arbitration 101
policies in 11314
population of 102, 103
private sector clusters in 105
public funds and compensation payments 1234
public sector organizations 100
regional innovation system (RIS) 1037
Top Sectors program 113
urban governance 44, 10911
vertical dimension 1079
The Hague Security Delta (HSD) 114
Hall, Peter A. 16
Harper, Robert 5
Harris, Charles 910
history
of Bern 467
of The Hague 100102
of Ottawa 735
of Washington, DC 12830
Hooghe, Liesbet 32
Horak, Martin 32, 38
horizontal dimension (MLG)
Bern 54
The Hague 109
Multilevel Governance (MLG) 356
Ottawa 8081
Washington, DC 139
horizontal institutional fragmentation 172
Hunter, Floyd 36
image building 234, 6061
in Bern 6061
explaining 163
in The Hague 11718
locational policies in secondary capital cities 1635
in Ottawa 8890
strategies in SCCs 234
in Washington, DC 1457
Imbroscio, David 18, 184
innovation policies 2023, 567, 5960, 160, 161, 181
of Bern 567, 5960
explaining 160
of The Hague 11217
locational policies in 16063
of Ottawa 868
of Secondary Capital Cities (SCCs) 2023
of Washington, DC 1435
InnovationQuarter (IQ) 112
institutional fragmentation 35, 51, 170
horizontal and vertical dimensions of 36
internal validity 202
international competitiveness 71
International Criminal Court 104
international economic functions 23
international organizations 1689
international schools 62
internationalization 37
interurban competition 1819
interview partners 11, 197
anonymized list of 198202
interviewing decision-makers 197
interviews 1011, 197
Irwin, Galen 10910
Jonas, Andrew 20
Kantor, Paul 16
KIBS see knowledge-intensive business services (KIBS)
knowledge application 29
knowledge-generating actors 31
knowledge infrastructure 23, 878
knowledge-intensive business services (KIBS) 30
firms 37
jobs 49, 76, 1034, 133
knowledge-intensive markets 26
knowledge-sharing 31
Kübler, Daniel 27, 32
Lambelet, Sébastien 38
Leydesdorff, Loet 162
Liberal Market Economies (LMEs) 185
LMEs see Liberal Market Economies (LMEs)
local autonomy 245, 345
locational policies 3, 1820, 29
acquisitions 256
of firms 16770
strategies 16770
agency in the formulation of 181
agendas 17880
in Bern 56, 59, 6972
business prerequisites 245, 1657
coordination 268, 17073
explanation of 44
explanatory factors of 177
in The Hague 11112, 1247
image building 234, 1635
innovation policies 2023, 16063
in Ottawa 836, 968
public funds and compensation payments 289, 1736
in Secondary Capital Cities (SCCs) 1820, 1736
‘structuring’ 38, 40
summary of findings 17680
types of 38
urban governance arrangements 1826
in Secondary Capital Cities 1826
in Washington, DC 142, 1568
Locational Policies Framework 3, 14, 20, 21, 192
lock-in 31, 32
Madison, James 1289
Malecki, Edward 16
Marks, Gary 32
Markusen, Ann 30
method of difference 41
Metropolitan Region of Rotterdam The Hague (MRTH) 112, 1212
Metropolitan Washington Council of Governments (MWCOG) 152
MLG see Multilevel Governance (MLG)
‘most similar systems’ design 44, 202
multifunction capitals 5
Multilevel Governance (MLG) 17, 18, 323, 177
in Bern 516
concept 4, 14, 32
dimensions of 33
dynamic analytical framework 39
in The Hague 10711
horizontal dimension 356
in Ottawa 7883
settings 33, 41
urban governance dimension 368
vertical dimension 345
in Washington, DC 13641
municipal budgets 25
MWCOG see Metropolitan Washington Council of Governments (MWCOG)
Nagel, Klaus-Jürgen 10
National Capital Act 74
National Capital Commission (Canada) 79
National Capital Region (NCR) 74
national economy 44
national government organizations 34
national tax system 34, 167, 178
national urban system 1
negative coordination 27
neo-institutional 3, 14, 17, 1923
neoliberal urban policies 1617, 186
The Netherlands 101
acquisition 169
corporatist tradition of 107
decentralized state system in 107
French occupation of 101
interdepartmental structures 120
levels of government in 113
polycentric urban region 101
population dynamics in 103
Randstad region in 35
real estate tax in 118
settlement structure of 108, 109
sources of income 108
state levels in 122
tax autonomy of 108
non-poaching agreement 153
non-reactive data 11
North American Free Trade Agreement (NAFTA) 912
O’Cleireacain, Carol 10
Ontario’s Municipal Act, 2001 79
Organisation for Economic Co-operation and Development (OECD) countries 3
organizational thinness 31
Organization for the Prohibition of Chemical Weapons (OPWC) 102
Ottawa 7883
acquisition strategy 912, 168
amalgamation 81
business prerequisites 9091
business representatives 812
case selection of 44
chambers of commerce in 82
city administration and economic development 182
cluster policies of 867
coordination 924
economic development plans 85
entrepreneurial ecosystems 87
exploitation subsystem 768
geography and population 756
governance of economic development in 81
governmental economic development funds 176
governmental money transfers 80
history of 735
horizontal dimension 8081
ICT technology center 778
image building 8890
innovation dynamics in 89
innovation policies 868
knowledge application 768
knowledge infrastructure 878
local autonomy of 79
local revenue composition 80
locational policies in 836, 968
map of 82
metropolitan regions of 41
multilevel governance setting 7883
national significance 79
political economy of 745
population dynamics in 75
property taxes 80, 90
public administration 77
public funds and compensation payments 946, 174
recognition of municipalities 79
regional economy 73
regional innovation system 768
sectorial approach 867
tax rate 90
urban governance dimension 813
vertical dimension 7980
Ottawa Centre for Research and Innovation (OCRI) 834, 86
Ottawa 20/20 initiative 84
Pagano, Michael A. 32
Partnership for Prosperity 84
payment in lieu of taxes (PILTs) 28
Permanent Court of Arbitration 1012
Pierre, Jon 37
Piliutyte, Jolita 27
place-based neighborhood development 150, 158, 166
place-bound assets 24
place marketing 234
place-specific assets 19
policy formulation 26
policy interventions 2930
political capitals 6
political economy 2, 3, 10, 14, 1516, 37, 187, 196
political institutions 3, 13, 14, 16, 33, 177, 187, 192
political legitimacy 183
population
of Bern 478
of The Hague 102, 103
of Ottawa 756
of Washington, DC 13032
positive coordination 267
primary cities, SCCs vs. 7, 8
property tax 185
exemption 25
finances 179
provincial capitals 6
public funds 289, 679
in Bern 679
description of 176
explaining 174
in The Hague 1234
locational policies in secondary capital cities 1736
in Ottawa 946
in Secondary Capital Cities (SCCs) 289
in Washington, DC 1546
public procurement processes 3032
public sector clients 30
public sector organizations, importance of 100
purpose-built capitals 175, 189, 190
purposely selected capitals 175, 189, 190
Putrajaya 7
‘Quality is key’ 111
quality of life 61, 63, 166
reactive interview data 11
Re-founding Bern (Bern NEU gründen) 556
regional choice 278
Regional Conference Bern-Midland 64
regional coordination 268
regional decentralization 74
regional economic development 27
regional innovation system (RIS) 17, 18, 22, 2931, 41
in Bern 41, 4951
concept 34, 14, 29
conceptualization of 32
constrains 61
definition of 31
development of 312, 41, 163, 167, 168
development stages 32
economic development policies in 16
in The Hague 41
in Ottawa 41, 768
Secondary Capital Cities (SCCs) 2932
subsystems 30
types of 1623
in Washington, DC 41, 1326
regional knowledge-generation 312
reliability 202
research questions 4
research strategy 202
Ricardo’s theorem 1819
RIS see regional innovation system (RIS)
Robert Dahl 36
Rome 9
Rowat, Donald 9
Savitch, Hank 16
SCCs see Secondary Capital Cities (SCCs)
Scharpf, Fritz 1415, 17, 26
Secondary Capital Cities (SCCs) 15, 14
acquisition of firms in 256
business actors in 1834
business prerequisites 245
causal mechanisms 1718
coordination 268
definition of 1, 510
dynamic analytical framework 39
economic definition of 45
economic institutions of 3
economic strength of 44
economy of 184
establishment of 89
formulation of locational policies in 44
image building strategies 234
innovation policies 2023
knowledge infrastructure in 23
local autonomy of 34
locational policies in 10, 14, 1820, 38, 177
metropolitan regions of 36
MLG setting in 33
Multilevel Governance 326
in OECD countries 3, 41
political institutions of 4
vs. primary cities 7, 8
public funds and compensation payments 289
regional innovation system (RIS) 2931
conceptualization of 32
development 312
stages in 32
revenue comparison of 17980
role of 1, 2
strategy of inquiry 1011
symbolic centrality of 12
traditional view of 2
urban governance arrangements in 1836
urban governance dimension 368
vertical dimension 345
segregation processes 150
semi-public development agencies 31
Silicon Valley 2, 144
Smart Cities and Communities European Innovation Partnership 28
social production model 37, 38, 183
Soskice, David 16
spatial proximity 22
state-anchored industrial districts 30
strategic locational policy 160
structuration theory 1718
structure-based explanations 17
structure conditions (corporate) strategy 17
structuring 4, 17, 18, 160, 181
causal mechanism 14
locational policies 38, 40
super capitals 6
see also capital cities; Secondary Capital Cities (SCCs)
Swiss Administrative Court 46
Swiss cities, jobs in 49
Swiss Confederation 47
Swiss Federal Spatial Concept 689
Swiss federalism 512
Swiss Global Enterprise (SGE) 64
Swiss Innovation Parks 58
Switzerland
agglomerations in 58
cities in 7
federal city status in 46
fiscal setting in 52, 61
French-speaking parts of 47
German-speaking parts of 65
local autonomy in 51
municipalities, tasks of 51
population dynamics in 48
re-urbanization trend in 48
urban agglomerations in 48
urban system of 47
symbolism 9
Tandem National Security Innovations (TandemNSI) program 143
tax 53
constraints 29
exemption 29
instruments 34, 1656
revenue 178, 17980
rights 25
system 171
tax autonomy 28, 1656, 1715
of capital cities 35
constraints 25
telecom 50
Tödtling, Franz 2930
transnational institutions 2
triple-helix 2021, 568, 126, 161, 1623, 176
Trippl, Michaela 2930
unemployment 112, 132
urban economic policies, cross-national comparisons of 180
urban governance arrangements 44, 55, 141, 150, 1826
locational policies in secondary capital cities 1826
in SCCs 184
summary of 182
urban governance dimension 368, 556, 813
Bern 556
The Hague 10911
Ottawa 813
Washington, DC 14041
urban politics 36
literature 17, 184
urban regime theory 378
US cities, jobs in 133
Uyarra, Elvira 16
Varieties of Capitalism (VoC)
Secondary Capital Cities (SCCs) 1417
theory 15, 16, 19, 177
vertical dimension
in Bern 513
in The Hague 1079
in Ottawa 7980
in Washington, DC 1369
vertical institutional fragmentation 36, 67, 76, 171, 173
Virginia, tax settings in 147
WankdorfCity 612
Ward, Kevin 20
Washington, DC 128
acquisition of firms 15052
business prerequisites 14750
case selection of 44
cluster policies 1434
coordination 1524
corporate income tax 148
development agenda 14950
diffusion subsystem 1356
economic development
agency 151
agents 152
dynamics 128
economic geography literature 128
employment in 134
foreign investors 146
geography 13032
history 12830
horizontal dimension 139
image building 1457
innovation policies 1435, 156
jurisdictions 1467, 151
knowledge economy 132
knowledge-generation 1356
knowledge infrastructure 145
locational policies in 142, 1568
multilevel governance setting 13641
personal income tax base 158
population 13032
public funds and compensation payments 1546
regional innovation system 1326
self-government 1489
tax rates in 147, 148
unemployment rate of 132
urban governance dimension 14041
vertical dimension 1369
Virginia’s tax settings 147
Washington, George 129
Weaver, Timothy 1617
Wellington 9
Wolfe, David 162
Work and Social Assistance Act (WSA) 112
Young, Robert 32