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Relocation of Public Sector Workers: Evaluating a place-based policy
Abstract
This paper investigates the local labor market impact of a UK relocation initiative – the 2004 Lyons Review. The review resulted in the dispersal of about 25,000 civil service jobs out of London and the South East towards other UK destinations. This study aims to detect whether the inflow of public sector jobs crowded out private sector activity or stimulated the local provision of jobs in the private sector. Focusing on short-term effects, I find that the relocation initiative raised private sector employment in receiving areas and changed the sectoral distribution of local employment towards services. I also find evidence of displacement, i.e. a tendency for private businesses to locate closer to a relocation site, moving out of areas at 1–2 km and 2–3 km distances into areas at 0–1 km distance. These agglomeration effects appear highly localized: the largest policy impact is found in areas that received the relocated jobs with spillover effects reducing sharply over distance.
... To address spatial disparities and regional inequalities, many countries have adopted public sector relocation as a policy tool (Faggio, 2019;Zou & Zhao, 2018). This approach involves transferring public institutions and service-oriented jobs from major cities to underdeveloped regions, thereby redistributing resources and fostering economic growth in the recipient areas (Marshall et al., 2005). ...
... Governments implement various place-based policies to counteract the economic decline of underperforming regions and create sustainable employment opportunities for local populations (Faggio, 2019;Lu et al., 2019;Todes & Turok, 2018). These policies are tailored to address the unique characteristics and developmental needs of specific regions, aiming to reduce economic disparities and promote balanced growth on national and regional scales. ...
... Since the 1960s, the United Kingdom has actively employed this approach to stimulate regional development. For example, in the early 2000s, over 25,000 civil service jobs were relocated from London and the Southeast to other regions, which significantly enhanced private-sector employment in the recipient areas (Faggio, 2019). Similarly, China launched numerous public sector relocation initiatives during the 2010s to optimize resource distribution and promote regional growth (Lu et al., 2024). ...
Urban vitality is a defining characteristic of successful cities and a cornerstone of sustainable development. However, sustaining this vitality has become an increasingly complex challenge as cities worldwide grapple with multifaceted urban issues. This dissertation explores how urban planning strategies can foster vibrant cities through three empirical studies that evaluate approaches at multiple scales. These studies offer insights relevant to both developed countries addressing urban decline and developing nations undergoing rapid urbanization, with a focus on South Korea, which serves as a representative case highlighting both the opportunities and challenges of contemporary urban planning. The first study evaluates the Yonsei-ro Transit Mall, a pedestrian-friendly street in Seoul. It leverages location-based big data and employs a controlled interrupted time series design to assess its impacts on pedestrian activity and commercial dynamics. The second study examines the economic effects of urban revitalization projects in Seongnam by applying a spatial hedonic model to analyze variations in land prices and the spatial effects of these initiatives. The third study investigates the spillover effects of public sector relocation policies on the socioeconomic vitality of adjacent primary cities. This analysis utilizes nighttime light data to determine whether these strategies foster intra-regional synergy or exacerbate competition. Collectively, this dissertation delivers a nuanced understanding of how multi-scale planning strategies can enhance urban vitality and provides practical implications for policymakers and urban planners.
... Crowding-out effects may be stronger than multiplier effects (see Alesina et al., 2001;Auricchio et al., 2020a;Senftleben-König, 2015), even though evidence on relocation policies is at present limited (see Becker et al., 2021;Faggio, 2019). ...
... We find that the policy had a positive and significant impact on private sector employment within a 300-meter radius of a relocation site, while private sector establishments located further away did not seem to benefit as much. Consistent with previous studies on public sector expansion (see, e.g., Jofre-Monseny et al., 2018;Faggio, 2019), this positive impact is largely driven by services with no change in manufacturing. Further decomposition of the main effect into sub-groups reveals that the policy positively affected media, tourism, and cafés & restaurants within the first 300 meters. ...
... Furthermore, we derive a measure of the local multiplier effect of approximately 1.3. Although this figure is not uncommon in the local multiplier literature (e.g., Moretti and Thulin, 2013), it is somewhat smaller than the estimates reported in previous studies on public sector relocation (e.g., Becker et al., 2021;Faggio, 2019). Becker et al. (2021) examine the relocation of the German government from Berlin to Bonn after WWII, which preceded the government return to Berlin analyzed in this paper and find a local multiplier of 1.86. ...
... Countries worldwide, including the UK, France, Sweden, and the United States, have strategically relocated public institutions to peripheral areas, aiming to foster local development and generate positive externalities from economic agglomeration. The UK's initiative, starting in the 1960s, aimed to ease London's congestion, a goal echoed in France's strategy since 1955 to decongest Paris (Faggio 2019;Marshall 2007). Sweden's 1970s policy targeted reducing Stockholm's population density (Jefferson and Trainor 1996). ...
... It particularly increases the proportion of the non-tradable sector that is consumed locally, while decreasing the share of the tradable sector. Over time, this trend intensifies, resulting in a marked decrease in the growth of the service sector and a more substantial decline in the manufacturing sector (Faggio 2019). Similarly, in Germany, an increase in public employment in Bonn was found to create amenity spillover effects but simultaneously decrease employment in the industrial sector, thereby limiting productivity spillovers (Becker, Heblich, and Sturm 2021). ...
... This analysis investigated the interactions between ICs and their adjacent cities to assess if the establishment of ICs extends economic benefits beyond their immediate boundaries. The existing literature suggests that the strength of agglomeration externalities decreases as the distance from the center of intervention increases (Andersson, Quigley, and Wilhelmsson 2009;Basile, Capello, and Caragliu 2012;Belenzon and Schankerman 2013;Faggio 2019;Rosenthal and Strange 2008;Van Soest, Gerking, and Van Oort 2006). This study employs a centroid-based methodology to identify the nearest city to the ICs by calculating the direct linear distances to the geographical centroids of neighboring cities. Figure 4 presents a map delineating each IC with a 10 km radius buffer to illustrate the area expected to experience the most pronounced spillover effects. ...
... Opponents of this view stress that the newly created jobs merely crowd out existing ones: possible general equilibrium effects in the form of higher housing rents raise local production costs with negative consequences for businesses. Crowding-out effects may be stronger than multiplier effects (see Alesina et al., 2001;Auricchio et al., 2020a;Senftleben-König, 2015), even though evidence on relocation policies is at present limited (see Becker et al., 2021;Faggio, 2019). The objective of this study is to identify which effect (multiplier or crowding out) prevailed in the German government case. ...
... We derive a measure of local multiplier of 1.33-1.37 -which is somewhat smaller than those suggested by previous studies on public sector relocation (see, e.g., Becker et al., 2021;Faggio, 2019) but not unseen in the local multiplier literature (see, e.g., Moretti and Thulin, 2013). We conclude by conducting a permutation test which confirms the validity of our estimates and that distance to a relocation site matters. ...
... with the largest effect found in the non-tradable sector. Faggio (2019) analyzes the impact of a UK relocation program (the Lyons Review) using information on 150,000 UK Census Output Areas. She finds that public employment has a positive impact on total private sector activity (multiplier of 2.1), with results mainly driven by services. ...
We use the German government move from Bonn to Berlin in 1999 to explore the interaction between public and private sector employment within a local labor market. We find that the move had a positive impact on private sector employment (local multiplier of 1.3-1.4), mainly driven by services. We find that the policy is bound in space and time, with the strongest effects found within the first 300 meters of a relocation site and recorded a year after the relocation episodes took place. We identify the profile of the average worker who benefited from the government move as a young or prime-age male of middle-skilled qualification working full-time in an intermediate occupation. JEL classification: R58, R23, J61, O1
... This paper contributes to the literature concerned with whether place-based policies have stimulated economic growth of the neighborhoods [7,[15][16][17]. While a growing body of literature evaluated the effectiveness of enterprise zone programs, mixed conclusions about program effectiveness were provided [18,19]. ...
... The benefit of this approach is that we need not to worry about the change of neighborhood boundaries from 2000 to 2010, and the same sized neighborhoods reduced bias when averaging outcome variables over different areas. Furthermore, existing literature evaluating enterprise zone programs has predominately focused on topics such as labor market outcomes [9,10,20,21], business location decisions [3,16], and changes to commercial and industrial property values [22]. Besides the effect on local labor market, this study also assesses the impact of the EDPAs on residential sorting behavior and local housing market using detailed data on sale prices of Atlanta residential properties. ...
... In addition, the Blinder-Oaxaca estimator also finds a significant 9.4% increase in the median household income and a 5.9% decrease in the fraction of residents that are black. Taken together the propensity score DID and the Blinder-Oaxaca DID, our results buttress the conclusion of much (but not all) of the literature that failed to find beneficial effects of enterprise zones in the United States for employment rate [10,16,32,35]. Though the lack of a significant effect on employment seems surprising in light of the EDPA program's incentives, economic theory provides some possible explanations for this finding. ...
Place-based policies refer to government efforts to enhance the economic performance of an area within its jurisdiction. Applying various difference in differences strategies, this study evaluates the neighborhood effects of a place-based policy—the Economic Development Priority Areas (EDPA) of Atlanta, Georgia, USA. Since the census block groups are locally defined and the boundaries may change over time, we defined the neighborhoods by creating a set of 0.25-mile- diameter circles evenly distributed across Atlanta, and used the created buffers as the comparison unit. The empirical estimates showed that EDPA designation significantly reduced poverty rate and increased housing price of EDPA neighborhoods but had no beneficial effects on population size and employment rate. The heterogeneous analysis with respect to different initial economic status of the neighborhoods showed a relative larger and significant effect of EDPA designation on low-income neighborhoods. The increasing labor demand induced by EDPA designation in low-income neighborhoods attracted more population to migrate in and put upward pressure on housing prices. The estimation results are robust when replacing the 0.25-mile-diameter circle neighborhoods with 0.5-mile-diameter circle neighborhoods. Although we found some positive effects of the EDPA program in Atlanta, it would be misguided to assume similar effects occur in other areas implementing place-based policies.
... The equal development with even land use makes it easier to manage labor costs, which would have been much higher in the overcrowded region under a concentrated scheme (Li, Schmidt, & Siedentop, 2024). This implies that the region-specific specialized industries can then function as independent engines for the regional growth (Courbis, 1979;Faggio, 2019;Marshall et al., 2005). Thus, concentration is necessary, but it becomes an impediment to a nation's overall growth beyond certain points. ...
Location and level of government are critical factors that promise statewide economic growth. While existing research is prone to focus on the role that the factors consistently contribute to growth, there is limited understanding of how the structural varieties of geographical concentrations and decentralization could be effective during economic crises. Based on data from 29 OECD countries between 2000 and 2019, this study finds mixed empirical findings. First, the result shows the degree of concentration standing for regional inequity per se has adverse effects on the growth, while allowing states to withstand economic crises, having a modest decline. Second, oppositely, the fiscal decentralization rapidly enhances nationwide economic growth but is prone to experience far more losses than its less decentralized counterparts. The patterns point out some limited application of both regional equity and fiscal decentralization for economic development, leaving an implication that local governance may be differently managed in consideration of economic shocks.
... In terms of contribution, our work can be situated within the applied urban economics literature on place-based policies (Cerqua and Letta, 2022;Cerqua and Pellegrini, 2022;Criscuolo et al., 2019;Faggio 2019;Freedman, 2015;Lu et al., 2019;Mayer et al., 2017;Schweiger et al., 2022). While this literature has focused primarily on ex-post counterfactual evaluations of place-based policies, our emphasis lies in exante policy targeting and the design of ML-based risk maps to inform targeted place-based policy rules. ...
This paper proposes a place-based approach for addressing workplace fatalities. We employ machine learning (ML) techniques and a comprehensive panel dataset from Italy to detect systematic patterns that pinpoint areas most at risk of on-the-job fatalities. The empirical analysis demonstrates that ML algorithms can accurately forecast, ex-ante, the number of workplace deaths out of sample. We then create a granular risk map based on the ML forecasts and compare it with the actual allocation of on-site work inspections and public subsidies to improve occupational safety, finding minimal overlap. This mismatch suggests that public effort is currently not more prevalent where it is most needed, at least with respect to on-the-job deaths. Lastly, we assess the impact of on-site inspections on the number of workplace deaths via double/debiased machine learning and show that inspections appear to be effective only in areas flagged as high risk by the ML forecasts. Overall, these findings suggest that by replacing current allocation rules with machine predictions, it would be possible to significantly improve the cost-effectiveness of public interventions and boost the deployment of deterrent and preventive measures aimed at enhancing occupational safety and health.
... Regional tax incentives are a crucial component of regional policy. Scholars, primarily focusing on the conditions of Western developed countries, argue that regional policies can foster economic agglomeration in less developed areas, enhancing employment levels [2,3], and improving local TFP [4]. These policies are also beneficial for economic development [5,6]. ...
The difficulty in transforming old industrial areas constitutes a significant factor contributing to regional development imbalances. Can regional tax incentives, as a crucial component of regional policies, polish the “rust belt” regions? This study leverages the inaugural Value-Added Tax (VAT) reform in China as an opportunity to explore the potential of regional tax incentives in achieving sustainable development in traditional industrial areas. Drawing upon a comprehensive industrial enterprise database, we employ a Propensity Score Matching-Difference in Differences (PSM-DID) approach to examine the efficacy of these tax incentives. Our findings reveal that: (1) Regional tax incentives primarily enhance firms productivity by stimulating investment in enterprises, yet they do not contribute to improved investment efficiency or spur innovation within firms. (2) Regional tax incentives have alleviated financing constraints for enterprises in old industrial bases, significantly enhancing the Total Factor Productivity (TFP) of firms with higher financing constraints. This policy has had an even stronger impact on improving the TFP of state-owned and monopolistic enterprises. (3) Regional tax incentives have impeded productivity growth by preventing the exit of low-efficiency firms and the entry of high-efficiency ones. These incentives also increased the likelihood of “zombie firms” forming and failed to promote endogenous economic growth in the Northeast region. Additionally, they have distorted the allocation of resources towards capital and technology-intensive industries in that area. In China’s old industrial bases, regional tax incentives should be coordinated with market-oriented reforms; these regional tax incentive policies should also be further enriched.
... First, the local economy can be stimulated by the jobs created by the regional level public sector and its demand. For example, Faggio (2019) shows how the relocation of civil service jobs in the UK raised private sector employment in the receiving places. Second, Dascher's (2000) assessment of the impact of changing the county-capital status of German cities, complemented with research on national capitals (see, e.g., Hall, 2006;Mayer et al., 2019), suggests that if laws and regulations frequently change, firms prefer to locate in capital cities to have access to government officials and information. ...
Among Polish cities facing socioeconomic difficulties are the former regional capitals which lost their administrative status due to the 1998 reform, reducing the number of regions. Making use of this quasi-experimental setting, we assess the impact of the loss of administrative status on the affected cities with difference-in-differences estimations. Our findings show the negative impact of the regional amalgamation on economic and, to a lesser extent, on other dimensions of local development. We identify the reform’s contribution to the growing disparity between the second-tier and the largest cities and reflect on the design of place-based compensatory measures.
... 1 Following this seminal paper, some progress has been made on the econometric estimation of multipliers, opening new research fields with respect to other variables, impacts or empirical techniques. Multipliers can be harnessed to obtain insights into public expenditure transmission mechanisms and how these transform into additional gains for permanent employment, a real concern for citizens, public authorities and governments (e.g., see Faggio and Overman, 2014;and Faggio, 2019, for the UK). The availability of more disaggregated spatial databases together with more sophisticated econometric models has to some extent redeemed past criticisms dismissing multipliers as a viable option in the long-established regional economics literature. ...
This paper offers policymakers a novel tool for calculating employment multipliers. A theoretical model incorporating a non-tradeable employment function is combined with a stochastic frontier methodology to estimate an accurate multiplier. The advantage of this model is that it allows a consideration of unobserved informal employment when estimating the multiplier. We find an employment multiplier effect of 1.2 jobs in the non-tradeable sector for one job in the tradeable sector. Also, the greater the number of skilled consumers, the higher the multiplier indices and the lower the level of informal employment. Moreover, specialised sectors requiring skilled workers also present less informal employment. We use provincial data for Spain over the period 1995-2013. KEYWORDS employment multipliers; tradeable and non-tradeable sectors; stochastic frontier analysis; informal employment; place-based policies; Spanish regions JEL C23, C26, J21, R11 HISTORY
... Assuming risk neutrality, the expected wage in the public sector (i.e. the probability of finding a job multiplied by the public sector wage) must be equal to the remuneration of labour in the private sector. 7 Apart from the literature discussed in the main text, our study is also closely related to two recent contributions which focus on understanding the effects of relocation programs in Germany and the UK (Faggio 2019;Becker et al. 2021). Both studies find small public employment multipliers in the nontradable sector. ...
This paper studies the impact of the remarkable increase in the share of public employment on the private sector across 156 Greek municipalities using Census data (1981–2011). To capture causal effects, we implement an instrumental variables approach, based on a shift-share design. We find that an additional job in the public sector creates nearly 0.7 jobs in the non-tradable sector (construction and services), whilst no significant effects are detected for the tradable sector (manufacturing). The findings appear to be robust to different estimation strategies, spillovers from contiguous regions, and to the inclusion of confounding factors. Importantly, we document that the most recent decline in the number of public servants did not significantly affect the private sector.
... This literature has documented that mass layoffs have dramatic and long-lasting effects on the employment levels of mass layoff establishments as well as on the employment and earnings prospects of displaced workers (Ruhm, 1991;Jacobson et al., 1993;Schoeni and Dardia, 2003;von Wachter et al., 2007;Couch and Placzek, 2010;Schmieder et al., 2010Schmieder et al., , 2022. 3 Second, the literature on the local spillover effects of place-based policies and other local labor demand shocks. This literature has evaluated various kinds of shocks-both positive and negative-including those caused by Enterprise and Empowerment Zones (Neumark and Kolko, 2010;Busso et al., 2013), the opening of new manufacturing plants (Greenstone et al., 2010), the relocation of government offices (Faggio et al., 2018;Faggio, 2019), the closure of military installations (Zou, 2018) and trade and technological change (Autor et al., 2015). A recent review by Duranton and Venables (2018) concludes that outcomes of place-based policies are often uncertain and that it is important to look beyond direct impacts to induced, indirect effects. ...
Using an event study approach and a novel data set that links administrative information on German establishments with exact distance measures from geo-referenced address data, we analyze the net impact of mass layoffs on local employment. We find that local spillovers significantly attenuate the direct impact of mass layoffs on municipal-level employment. About a quarter of the 1-year direct employment loss due to a mass layoff event is absorbed within the same municipality. Local spillovers are especially pronounced very close to the mass layoff site; the majority of the absorption is concentrated within a 1000-m radius. There is little evidence of spillovers beyond the affected municipality.
... However, as the spatial distance between areas further expands, the spillover effect of place-based policies will gradually decrease or even disappear, and its impact on the peripheral areas will no longer be significant (Cao, 2020). Much empirical evidence has supported this theory (Kline and Moretti, 2014;Briant et al., 2015;Faggio, 2019). Therefore, Hypothesis 2 is proposed: ...
To reduce the increasingly severe air pollution caused by rapid industrialization, China has introduced a National Industrial Relocation Demonstration Zones (NIRDZs) policy. This paper takes the NIRDZs as a quasi-natural experiment and employs the difference-in-differences (DID) method to test the effects of industrial relocation on air pollution based on panel data of 285 prefecture-level cities from 2003 to 2018. Results show that the NIRDZs have an inhibitory effect on SO2 emissions, although their local effect is significant in the first 5 years and their spillover effect only occurs within 50–100 km. Mechanism analysis reveals that the NIRDZs reduce air emissions by rationalizing and upgrading the industrial structure. Additionally, further discussions suggest that cities with moderate administrative areas and abundant natural resources should be prioritized as pilot cities, and industries including nonferrous metals, steel, automotive, new energy, new materials, and producer services should be designated as priority industries.
... First, the local economy can be stimulated by the jobs created by the regional level public sector and its demand. For example, Faggio (2019) shows how the relocation of civil service jobs in the UK raised private sector employment in the receiving places. Second, Dascher's (2000) assessment of the impact of changing the county-capital status of German cities, complemented with research on national capitals (see, e.g., Hall, 2006;Mayer et al., 2019), suggests that if laws and regulations frequently change, firms prefer to locate in capital cities to have access to government officials and information. ...
... Some studies have evaluated the financial costs and benefits of relocating (Ashcroft et al., 1988;Goddard & Pye, 1977;. Others have analyzed the impact of relocation on the local labor market of the destination cities and demonstrated that relocation could help to balance national development (Faggio, 2019;Faggio & Overman, 2014;Jun, 2007) and provide seed development and population in new towns . ...
This article examines the impact of the relocation policy of the Beijing Municipal Government on the turnover intention of staff. Based on 1005 questionnaires and an instrumental variable regression, we find that commute dissatisfaction and family dilemmas are important reasons for the increased turnover intention after relocation. Female staff, partners who are both working in the Beijing Municipal Government, and staff with children attending good schools in Beijing were severely affected, particularly due to family dilemmas. Planners and policymakers need to manage the potential jobs-housing imbalances that emerge from intra-metropolitan government job resettlement plans. Subsequently, policies to improve the living conditions of new subcenters can increase the benefits of the population and employment decentralization as part of public sector relocation plans.
... As the IC project has entered its second round, research on associated policies has been actively conducted in various fields, and the need for assessing the effect of IC development on balanced urban development has also risen. Considering that urban spatial structure has been reshaped during and after the IC development process, a comprehensive investigation into transitional spatial structures can be conducted to assess whether relevant policy objectives have been achieved [10][11][12][13]. ...
Innovation City projects, aimed at balanced national development in South Korea, have relocated public institutions from the Seoul metropolitan area to provinces, decentralizing population and economic functions, over the past decade. This study measured changes in regional centrality (the central and local location or hierarchy of objects in a network) at the 14 cities where Innovation City projects were constructed. Commuter Origin-Destination data were analyzed using Rstudio. In the case of connectivity centrality, 13 out of 14 regions saw a rise in centrality values; among them, Busan, Daegu, and Ulsan belong to large cities. This suggests that the impact of Innovation City projects on established metropolitan areas may not be very significant. Five of the 14 projects increased the value of eigenvector centrality, while 10 increased the centrality ranking. This means that the absolute traffic volume of Innovation Cities across the country had increased, while the centrality of areas around these cities declined, suggesting that Innovation Cities should pursue co-prosperity with surrounding areas. In this way, Innovation Cities can have a positive impact on surrounding areas, and positive externalities of relocation projects are maximized. However, such development effects are confined to Innovation City areas, negatively influencing balanced regional development.
Interregional disparity is still growing in developing countries and persists even in many developed countries. This study examines the effectiveness of the growth pole development policy on population dispersion. Specifically, it analyzes the impact of relocating government-related jobs to lagging regions on migration patterns between urban regions at national and local levels, using the South Korean case. The estimation results show mixed spread and backwash effects from the new growth pole, Sejong City (new administrative capital), but decreased over time. The global-level (nationwide) spread effects did exist but not last long enough to reduce the interregional disparities from the overconcentration in Seoul Metropolitan Area. Also, the estimated local-level backwash effects (hollowing out) to Sejong City had also weakened over time. These findings underscore the importance of the integrated system of growth pole covering the surrounding regions in enhancing the regional livability. The major contribution of this paper is threefold. First, it employed the migration effectiveness measure to directly evaluate population redistribution goal in growth pole development policy. Second, the policy impact is analyzed at two different levels: nationwide (global) and regional (local) levels. The global model estimated the dispersion effects from a leading region to the lagging regions on a nationwide scale, while the local model estimated the backwash effects into a new growth pole from neighboring regions. Finally, the policy interventions should be consistent and comprehensive with the aim to decrease regional disparities by developing integrated system of growth pole in collaboration with various regional stakeholders.
The relocation of the Capital City to the Nusantara presents significant challenges for the Civil Servant (ASN), including a potential decline in their work performance. This research aims to investigate risk mitigation efforts against the decline in ASN work performance after the relocation to Nusantara using the Systematic Literature Review (SLR) method. Through a careful and selective literature search, this study analyzes frameworks, strategies, and practical steps to address the risks associated with the decline in ASN work performance following the relocation of the capital city. The findings from this study provide deep insights into risk mitigation approaches. We also present practical implications and recommendations for further research to help the government and relevant organizations design effective strategies to maintain optimal ASN performance during and after the capital city's relocation process.
How do radical reforms shape economic development over time? In 1790, the French Constituent Assembly overhauled the kingdom’s organization to establish new local capitals. In some departments, the choice of local capitals over rival candidate cities was plausibly exogenous. We study how changes in administrative presence affect state capacity and development in the ensuing decades. In the short run, administrative proximity increases taxation and investments in law enforcement. In the long run, capitals obtain more public goods and grow faster. Our results shed light on the dynamic impacts of state building following one of history’s most ambitious administrative reforms. (JEL D70, H41, H71, O18, O43)
The relocation of the Capital City to the Nusantara presents significant challenges for the Civil Servant (ASN), including a potential decline in their work performance. This research aims to investigate risk mitigation efforts against the decline in ASN work performance after the relocation to Nusantara using the Systematic Literature Review (SLR) method. Through a careful and selective literature search, this study analyzes frameworks, strategies, and practical steps to address the risks associated with the decline in ASN work performance following the relocation of the capital city. The findings from this study provide deep insights into risk mitigation approaches. We also present practical implications and recommendations for further research to help the government and relevant organizations design effective strategies to maintain optimal ASN performance during and after the capital city's relocation process.
In this paper, we investigate the impact of municipal mergers on residential mobility in a quasi-natural experiment setting by examining how local economic environment and neighborhood composition respond to the loss of local public administration. Utilizing comprehensive neighborhood-level data from Denmark spanning 1996 to 2015, we find that the loss of the town-hall triggers emigration, leading to a reduction in locally supplied public goods. This affects the local housing market and job availability, leading to lower housing prices, higher wages, and longer commutes. Ultimately, the loss of the town-hall bears major negative consequences for inhabitants.
This paper investigates the spillover effect of government locations on economic growth by exploring more than 180 relocation events of city governments in China. Empirical results demonstrate that government relocations improve regional economic growth measured by night lights. This positive effect decreases with the distance to city governments’ new locations. Government relocations are also found to accelerate urbanization. Potential mechanisms include the changes in land conversion and firm birth patterns in the move-in areas. These results indicate that the relocation of local governments can be an effective place-based policy to improve economic growth and urbanization.
La création d’agences gouvernementales en dehors des ministères est souvent justifiée par la nécessité de préserver l’autonomie des agences. En plus d’une « agencification formelle », c’est-à-dire l’érection de barrières formelles entre les agences et les ministères, les agences sont souvent (ré) installées physiquement à l’écart des ministères pour mettre en avant et renforcer leur autonomie. Cependant, on sait peu de choses sur les effets de la localisation physique et de la distance sur l’autonomie de l’agence. À l’aide de deux grandes enquêtes de 2006 et 2016, cette étude examine comment la situation géographique et la distance influencent l’autonomie des agences. Notre étude établit que l’autonomie des agences n’est que faiblement associée à la localisation physique et à la distance, et que ces facteurs sont beaucoup moins importants que l’importance politique. Alors que l’on estime généralement que l’autonomie des agences peut être renforcée par leur (re) positionnement physique à une distance suffisamment éloignée de l’exécutif, notre étude suggère que le (re) positionnement physique représente un outil de conception de politique administrative in efficace lorsqu’il est appliqué à l’autonomie de l’agence. Remarques à l’intention des praticiens La distance physique entre les agences et les ministères parents n’est associée que de loin à l’autonomie des agences. La localisation physique représente donc un outil de conception inefficace si l’objectif est d’accroître l’autonomie des agences
This paper draws upon a quasi‐natural experiment of county‐city mergers in China to examine whether state‐led urbanisation makes a difference in local labour markets. Based on the difference‐in‐differences framework and three waves of data from the China Household Finance Survey , we show that, on the urban fringe, residents' probability of working in nonagricultural sectors increased by 6.69 percentage points after the policy. Residents responded mainly by shifts from the agriculture sector to being self‐employed. The results indicate that, after fringe counties connect to the corresponding big city in substance, residents in peripheral areas could benefit from the positive spillover effect from large cities and gain employment.
An extensive, large-scale relocation of public institutions occurred in South Korea in the 2010s. The local policy governing this relocation was implemented to mitigate metropolitan concentration and advance equitable regional development. The policy's ultimate goal was to bolster the fiscal foundations of local governments to facilitate regional economic self-sufficiency. This study employs a synthetic differences-in-differences methodology to analyze the repercussions of public institution relocation on local government revenue. Ultimately, our findings fail to provide unequivocal evidence of a significant impact on various local revenue streams; in fact, they indicate a decrease in total revenue per capita. This study intimates that, from a local fiscal perspective, the efficacy of local reinvigoration policies via the relocation of public institutions may be limited, underscoring the importance of implementing a range of supplementary measures to facilitate the transformation of these urban centers into self-sustaining entities.
Points for practitioners
This study highlights the limitations of relying solely on large-scale relocation of public institutions to stimulate local economies in South Korea. Despite policy intentions, our findings indicate a decrease in total revenue per capita, suggesting a need for supplementary measures to foster sustainable urban development. Practitioners should consider diverse strategies beyond relocation, emphasizing holistic approaches to bolster regional economic self-sufficiency and mitigate metropolitan concentration for equitable growth.
The impact of the incumbent state-owned enterprises (SOEs) on the births of new private-owned enterprises (POEs) in China is a central concern for the government and society. In this paper, we apply agglomeration theories to distinguish the linkages between SOEs and POEs. Using China's 2008 economic census, the 2007 Input-Output Table, and the 2005 population census, we measure the formation of new POEs at the city-industry level, and the agglomeration forces of distance proximity to inputs, outputs, labor, and technology. More explicitly, we measure the extent to which local SOEs provide relevant inputs, consume outputs, employ similar workers, and use similar technology. Our findings indicate that overall, incumbent SOEs hinder the formation of new POEs. For manufacturing, the entry of new POEs is significantly lower in places where more upstream SOEs are concentrated. For services, the entry of new POEs is significantly lower in places where more upstream and downstream SOEs are concentrated. However, the agglomeration effects from the incumbent POEs are either insignificant or significantly positive.
South Korea’s Innovation City policy aims to balance the geography of economic activity across the country by relocating public institutions to local cities. The economic impact of relocating public institutions to local cities has been assessed by examining job creation, public spending, the quality of public services or demands for housing and employment in donor cities. However, as economies have become increasingly knowledge-based, the attractiveness of urban areas to young workers has become a metric to measure an area’s economic development potential. There is a paucity of research on the economic impact of relocating public institutions that analyses the attractiveness of the destination cities for young people. Thus, this paper examines the migration of young people to evaluate the economic impact of relocating public institutions on the balanced geography of economic activity across the country. The examination was conducted by analysing the effects of (1) agglomeration area location type and (2) general place quality on young people’s migration. Quasi-experimental research and panel regression (2010–2019) were conducted on 12 agglomeration areas. The findings revealed that relocating public institutions was more likely to attract young migrants than the control group, whereas outskirt agglomeration areas attracted and retained young people more than inner city agglomeration areas. Relocating public institutions is a strategic means of attracting young people to local cities to balance the geography of economic activity. Here, the effect of relocating public institutions on young people’s migration varies depending on the location of agglomeration areas and the place quality of destination cities.
This study examines the long-term effects of a significant place-based policy in China's history- “The Construction of Third Front”, which led to the relocation of significant amounts of industry and labor from coastal to inland regions under the central government's control. Using a spatially discontinuous design, we identify that the policy has resulted in a hindrance to the development public services in the affected regions over time, with the gap between these and the eastern regions continuing to widen. We argue that the overzealous intervention of the central government disrupted the efficiency of factor allocation in the TF region and caused a significant impact on supply and demand patterns for public services in this area, which persists even after the cessation of the policy.
JEL codes:H41, H50, O25
Establishing government agencies outside ministerial departments is frequently justified by a need to safeguard agency autonomy. In addition to ‘formal agencification’, that is, erecting formal barriers between agencies and ministries, agencies are also frequently (re)located physically distant from ministries to both signal and strengthen agency autonomy. However, we know little of the effects of physical location and distance on agency autonomy. Using two large surveys from 2006 and 2016, this study examines how geographical location and distance affect agency autonomy. Our study establishes that agency autonomy is only weakly associated with physical location and distance, and is much less important than political salience. Whereas a conventional claim is that agency autonomy may be strengthened by physically (re)locating agencies at arm's length distance from the core executive, our study suggests that physical (re)location represents an ineffective administrative policy design-tool when applied to agency autonomy.
Points for practitioners
Physical distance between agencies and parent ministries is only remotely associated with agency autonomy. Physical location thus represents an ineffective design-tool if the purpose is to increase agency autonomy
The aim of this study is to perform a locally specific investigation of a polycentric development policy through the lens of the property market. The capital city of China, Beijing, adopted a sub‐center program for the purpose of developing a new economic growth pole in the suburbs through the redistribution of administrative and economic resources. Herein, we exploit spatial and temporal differencing in micro property transaction data to address the issue of non‐random selection of the site for developing the sub‐center. The results show that in the first year after announcing the sub‐center program, property prices in the sub‐center rose by 10.5%, stabilizing at approximately 20% after two years of continuous increase. Moreover, property price growth decreases sharply with increased distance from the new administrative center in the sub‐center, which will host tens of thousands of civil servants under the sub‐center program. In response to the sub‐center‐induced demand shock, locations with elastically supplied housing have experienced greater population growth and weaker appreciation in property prices. Although strict purchase restrictions have helped stabilize the sub‐center's property market to some extent, the fever has then spread to adjacent markets. The specific geography of property market dynamics provides an important channel to evaluate the impact of the sub‐center program and offers insight regarding the development of tactics to optimize sub‐center outcomes. This article is protected by copyright. All rights reserved.
I examine the economic consequences of prisons on local communities using two complementary approaches. The first uses prison openings during the 1990s across the US and the second exploits the results of the prison site-selection competitions in Texas. Prisons bring substantial and persistent gains in public employment. However, additional jobs at the prisons generate little spillover effects on private sector employment and fail to provide a major boost to local economic activity – overall resulting in approximately a one-for-one increase in local employment. Neighborhoods closest to prisons also experience declines in housing values and demographic shifts towards low-socioeconomic status households.
This paper reviews the role of specific fiscal spending and transfer programmes in shaping labour market dynamics by disentangling different macroeconomic and microeconomic mechanisms. The paper presents the recent empirical evidence on the topic in an attempt to abstract several empirical regularities and identify research gaps. The analysis also highlights gaps in the literature and suggests how future research could fill these gaps.
This paper analyzes human capital externalities from high-skilled workers by applying functional regression to precise geocoded register data. Functional regression enables us to describe the concentration of high-skilled workers around workplaces as continuous curves and to efficiently estimate a spillover function determined by distance. Furthermore, our rich panel data allow us to address the sorting of workers and disentangle human capital externalities from supply effects by using an extensive set of time-varying fixed effects. Our estimates reveal that human capital externalities attenuate with increasing distance and disappear after 25 km. Externalities from the immediate neighborhood of an establishment are twice as large as externalities from surroundings 10 km away.
This paper explores the effects of public agency relocation on the growth of local employment. The South Korean government has recently relocated 154 public agencies from the Seoul Metropolitan Area to local cities, called “Innovation Cities.” This policy was formulated to foster decentralization and regional development. However, only a few studies have examined the impact of this relocation. The innovation cities seem to be suffering from a lack of innovation, and the effects of decentralization. In this study, we evaluated the effects of relocation by using the synthetic control method and applying panel data gathered from 2006 to 2018. The unit of analysis is the small tier of local authority, and the outcome variable is the number of workers within each regional jurisdiction. To investigate counterfactuals, we determined control groups by selecting specific covariates of local employment. The results show that the increase in local employment was mostly caused by the migration of public agency employees to the destination areas. Spillovers are limited and influenced by regional characteristics.
This paper evaluates the impact of changes in public employment on private sector activity using the creation of the new West German government in Bonn in the wake of the Second World War as a source of exogenous variation. To guide our empirical analysis, we develop a simple economic geography model in which public sector employment affects private sector employment through its impact on wages and house prices and also through potential productivity and amenity spillovers to the private sector. We find that relative to a control group of cities, Bonn experiences a substantial increase in public employment. However, this results in only modest increases in private sector employment with each additional public sector job destroying around 0.2 jobs in industry and creating just over one additional job in other parts of the private sector. We show how our model can explain this finding and provide several pieces of evidence for the mechanisms emphasized by the model.
This paper presents an impact evaluation of the French enterprise zone program which was initiated in 1997 to help unemployed workers find employment by granting a significant wage-tax exemption (about one third of total labor costs) to firms hiring at least 20% of their labor force locally. Drawing from a unique geo-referenced dataset of unemployment spells in the Paris region over an extensive period of time (1993-2003), we are able to measure the direct effect of the program on unemployment duration, distinguishing between short- and medium-term effects. This is done by implementing an original two-stage empirical strategy using individual data in the first stage and aggregate data and conditional linear matching techniques in the second stage. We show that although the enterprise zones program tended to "pick winners", it is likely to be cost-ineffective. It had a small but significant effect on the rate at which unemployed workers find a job (which is increased by a modest 3 percent). This effect is localized and significant only in the short run (i.e. at best during the 3 years that follow the start of the policy).
This paper presents an empirical methodology for the evaluation of the benefits and costs of land use planning. The technique is applied in the context of the Town and Country Planning System of the UK, and examines the gross and net benefits of land use regulation and their distribution across income groups. The results show that the welfare and distributional impacts can be large.
Policy makers view public sector-sponsored employment and training programs and other active labor market policies as tools for integrating the unemployed and economically disadvantaged into the work force. Few public sector programs have received such intensive scrutiny, and been subjected to so many different evaluation strategies. This chapter examines the impacts of active labor market policies, such as job training, job search assistance, and job subsidies, and the methods used to evaluate their effectiveness. Previous evaluations of policies in OECD countries indicate that these programs usually have at best a modest impact on participants' labor market prospects. But at the same time, they also indicate that there is considerable heterogeneity in the impact of these programs. For some groups, a compelling case can be made that these policies generate high rates of return, while for other groups these policies have had no impact and may have been harmful. Our discussion of the methods used to evaluate these policies has more general interest. We believe that the same issues arise generally in the social sciences and are no easier to address elsewhere. As a result, a major focus of this chapter is on the methodological lessons learned from evaluating these programs. One of the most important of these lessons is that there is no inherent method of choice for conducting program evaluations. The choice between experimental and non-experimental methods or among alternative econometric estimators should be guided by the underlying economic models, the available data, and the questions being addressed. Too much emphasis has been placed on formulating alternative econometric methods for correcting for selection bias and too little given to the quality of the underlying data. Although it is expensive, obtaining better data is the only way to solve the evaluation problem in a convincing way. However, better data are not synonymous with social experiments.
During the past 15 years, Swedish higher education policy has emphasized the spatial decentralization of post-secondary education.
We investigate the economic effects of this decentralization policy on productivity and output per worker. We rely upon a
14-year panel of output and employment for Sweden's 285 municipalities, together with data on the location of university-based
researchers and students, to estimate the effects of exogenous changes in educational policy upon regional development. We
find important and significant effects of this policy upon the average productivity of workers, suggesting that the economic
effects of the decentralization on regional development are economically important. We also find evidence of highly significant,
but extremely localized, externalities in productivity. This is consistent with recent findings (e.g., Rosenthal and Strange,
2003) on agglomeration in ‘knowledge industries.’
Currently available asymptotic results in the literature suggest that matching estimators have higher variance than reweighting estimators. The extant literature comparing the finite sample properties of matching to specific reweighting estimators, however, has concluded that reweighting performs far worse than even the simplest matching estimator. We resolve this puzzle. We show that the findings from the finite sample analyses are not inconsistent with asymptotic analysis, but are very specific to particular choices regarding the implementation of reweighting, and fail to generalize to settings likely to be encountered in actual empirical practice. In the DGPs studied here, reweighting typically outperforms propensity score matching.
Despite the pervasive nature of land use planning and land use regulation, evaluation of the costs and benefits of these policies has received only limited attention. This paper presents an empirical methodology, based on clear microeconomic foundations, for the evaluation of benefits and costs of land use planning. The technique is applied to the Town and Country Planning System of the UK. Evaluation is presented of gross benefits from several land use planning activities, the net costs of land use planning, and the distributional consequences of these policies. The results show that these welfare and distributional impacts are considerable.
Office space in Britain is the most expensive in the world and regulatory constraints are the obvious explanation. We estimate the 'regulatory tax' for 14 British and 8 continental European office locations. The values for Britain are substantially greater than elsewhere. Exploiting panel data, we provide strong support for our hypothesis that the regulatory tax varies according to local prosperity and its responsiveness to this depends on whether an area is controlled by business interests or residents. Our results also imply that the cost to office occupiers of the 1990 conversion of commercial property taxes from a local to a national basis exceeded any plausible rise in property taxes. Copyright © The Author(s). Journal compilation © Royal Economic Society 2008.
This paper quantifies the impact of public employment on local labor markets in the long-run. We adopt two quantitative approaches and apply them to the case of Spanish cities. In the first, we develop a 3-sector (public, tradable and non-tradable) search and matching model embedded within a spatial equilibrium model. We characterize the steady state of the model, which we calibrate to match the labor market characteristics of the average Spanish city. The model is then used to simulate the local labor market effects of expanding public sector employment. In the second empirical approach, we use regression analysis to estimate the effects of public sector job expansions on decadal changes (1980–1990 and 1990–2001) in the employment and population of Spanish cities. This analysis exploits the dramatic expansion of public employment that followed the advent of democracy in the period 1980 to 2001. The instrumental variables' approach that we adopt uses the capital status of cities to instrument for changes in public sector employment. The two empirical approaches indicate that public sector jobs crowd-in private employment. This job increase concentrates in the non-tradable sector as the higher local wage bill increases local demand for the non-tradable good. However, these new jobs do not translate into a substantial reduction in the local unemployment rate as better labor market conditions increase the city's labor force due to migration.
In this article, we study the impact of a French enterprise zone program—the ‘Zones Franches Urbaines’ (ZFUs) policy—on establishment location decisions and on labor market outcomes. Our main identification strategy, which combines spatial and time differencing, shows that conditional on locating in a municipality that hosts a ZFU, the policy has a positive and sizable impact on the probability to locate in the ZFU part rather than in the non-ZFU part of municipalities. However, the impact is highly heterogeneous across zones, industries and firms. We also show that this positive effect is entirely due to within-municipality diversion effects. Regarding labor market outcomes, the policy has a positive effect on employment, especially for low-wage workers. As for wages, the effect is null for low-wage workers, and negative for high-wage ones.
This article examines the policy of Fifth Republic governments towards the modernization of the French civil service, with particular reference to the period since 1989. It has three main objectives. The first is to clarify the terms of the French debate about the crisis of the state, which is necessary to an understanding of the intellectual context of reform. The second is to describe and analyse the various strands of 'administrative modernization' policy. The third is to provide an interim assessment of the impact on the structure and culture of the civil service of what is an on-going programme of administrative reform. The origins and development of modernization policy are examined from a 'regulationist' perspective which emphasizes that modernization is intended to re-assert the legitimacy and effectiveness of state action, most notably by deconcentrating the management of public policies to the 'local' civil service.
Since the mid-1980s, successive French governments have attempted to 'modernize' the structures and methods of public administration. Although this vocabulary of 'modernization' is distinctly French, many of the actual reforms appear, at first sight, to be based on imported 'new public management' doctrines. In this article, 1 we analyse the recent French reforms and the ideas underpinning them and we attempt to locate these reforms in their comparative context, employing data from a wide range of official reports and secondary sources and from a series of semi-structured interviews with senior officials. We build on the analyses of Hood (1991 and 1995) and Wright (1994) that if many governments are dealing with similar problems by adopting similar approaches to reforms based on private sector management methods, the actual nature of the reforms in any individual state depends on the national context, or 'initial endowment'. In France, the importance of administrative law, the successful experience of nationalized, monopoly, public-service providers in the post-war period, the political weight and established rights of civil servants, and the idea of the 'general interest', represented at the local level by the prefect, explain many of the distinctive features of the hybrid modernization reforms. In short, an analysis of the policy of modernization and its origin leads to conclusions which are highly consistent with new institutional explanations of policy making (Hall 1987).
Government efforts to improve local economic conditions by encouraging private investment in targeted communities could affect the broader geographic distribution of employment in a region, especially to the extent that subsidized businesses face few constraints on whom they hire. This paper examines the labor market impacts of investment subsidized by the U.S. federal government’s New Markets Tax Credit (NMTC) program, which provides tax incentives to promote business investment in low-income neighborhoods. To identify the program’s effects, I exploit a discontinuity in the rule determining the eligibility of census tracts for NMTC-subsidized investment. Using rich administrative data on workers’ residence and workplace locations, I find evidence that many of the new jobs created in areas that receive subsidized investment do not go to residents of targeted neighborhoods. The results suggest that the local economic benefits of place-based programs may be diluted when subsidized businesses have scope to hire from broader regional labor markets.
The public sector has been viewed as a cushion to the impact of the recession by many city leaders, but as public spending falls so too will public sector employment. The public sector is a big employer in UK cities, on average providing more than one in four jobs. Nationally, over seven million people are employed in public sector activities. Over the past decade, the public sector has been one of the key drivers of growth in the UK. Over two thirds of the 1.2 million net additional jobs created in UK cities between 1998 and 2007 were in public administration, education and health. The recession has resulted in a permanent hit of £90 billion a year to the Government's income. The Government deficit could now reach 14 percent of GDP in 2009-10. Spending cuts look to be inevitable and the public sector will need to shrink. Local authorities and many central departments – all major employers in UK cities -may face annual spending cuts that exceed five percent in real terms during the period 2011-14. Those cities overly dependent on public sector employment will be hit hard. While flexible working and wage freezes will provide some of the savings required, job losses are inevitable. Public sector employment could shrink by 240,000 to 290,000 jobs between 2009 and 2014.
The drive for efficiency in national government has given an increased impetus to Civil Service relocation away from London and the South East. This provides opportunities for regional development similar to those in business support operations in the private sector. In assessing such opportunities, the paper looks at the economic benefits and costs of public sector relocation. The history of Civil Service relocation and the motivating factors are examined. Regional development agencies cannot offer the same inducements as do private services, but they have broadened their activities in order to attract mobile public-sector employment.
This article examines the nature of policy evaluation with particular reference to the twin concepts of deadweight and additionality. Two different perspectives on evaluation are presented, namely: (a) a 'control' model based on assessing the value for money of a policy intervention where emphasis is often placed on the measurement of deadweight and additionality and (b) a 'helping' model where the emphasis is on providing feedback on the policy or program in question, thereby leading to a mutual learning process. A critical analysis is presented of the way in which the concepts of deadweight and additionality are treated in evaluations, with evidence drawn from the evaluation of various industrial support schemes in Northern Ireland.
In this paper, we study the impact of a French enterprise zones program---the ``Zones Franches Urbaines'' (ZFUs) policy---on establishments' location decisions. Our empirical analysis is based on a micro-geographic dataset which provides exhaustive information on the location of establishments in France over the period 2000-2007 at the census block level. We use a difference in difference approach combining spatial and time differencing. We also do triple difference estimations, using the fact that targeted urban areas have been selected in different waves over time. Finally, we exploit a discontinuity in the eligibility criteria of the policy as an exogenous source of variation to estimate the impact of the treatment. Our results show that the French ZFU policy has a positive and sizable impact on location choices. However, we also find that the policy mostly generates displacement effects, in particular through relocation of firms from the un-treated to the treated part within municipalities. Finally, the impact is shown to be highly heterogeneous across zones, firms and industries. The overall cost of moving establishments within municipalities is relatively high.
This paper considers the impact of public sector employment on local labour markets. Using English data at the Local Authority level for 2003 to 2007 we find that public sector employment has no identifiable effect on total private sector employment. However, public sector employment does affect the sectoral composition of the private sector. Specifically, each additional public sector job creates 0.5 jobs in the nontradable sector (construction and services) while crowding out 0.4 jobs in the tradable sector (manufacturing). When using data for a longer time period (1999 to 2007) we find no multiplier effect for nontradables, stronger crowding out for tradables and, consistent with this, crowding out for total private sector employment.
Two-stage least squares (TSLS) is widely used in econometrics to estimate parameters in systems of linear simultaneous equations and to solve problems of omitted-variables bias in single-equation estimation. We show here that TSLS can also be used to estimate the average causal effect of variable treatments such as drug dosage, hours of exam preparation, cigarette smoking, and years of schooling. The average causal effect in which we are interested is a conditional expectation of the difference between the outcomes of the treated and what these outcomes would have been in the absence of treatment. Given mild regularity assumptions, the probability limit of TSLS is a weighted average of per-unit average causal effects along the length of an appropriately defined causal response function. The weighting function is illustrated in an empirical example based on the relationship between schooling and earnings.
This paper examines the effects of investment subsidized by the federal government's New Markets Tax Credit (NMTC) program, which provides tax incentives to encourage private investment in low-income neighborhoods. I identify the impacts of the program by taking advantage of a discontinuity in the rule determining the eligibility of census tracts for NMTC-subsidized investment. Using this discontinuity as a source of quasi-experimental variation in commercial development across tracts, I find that subsidized investment has modest positive effects on neighborhood conditions in low-income communities. Though spillovers appear to be small and crowd out incomplete, the results suggest that some of the observed impacts on neighborhoods are attributable to changes in the composition of residents as opposed to improvements in the welfare of existing residents.
Since the mid-1980s, successive French governments have attempted to ‘modernize’ the structures and methods of public administration. Although this vocabulary of ‘modernization’ is distinctly French, many of the actual reforms appear, at first sight, to be based on imported ‘new public management’ doctrines. In this article, we analyse the recent French reforms and the ideas underpinning them and we attempt to locate these reforms in their comparative context, employing data from a wide range of official reports and secondary sources and from a series of semi-structured interviews with senior officials. We build on the analyses of Hood (1991 and 1995) and Wright (1994) that if many governments are dealing with similar problems by adopting similar approaches to reforms based on private sector man-agement methods, the actual nature of the reforms in any individual state depends on the national context, or ‘initial endowment’. In France, the importance of administrative law, the successful experience of nationalized, monopoly, public-service providers in the post-war period, the political weight and established rights of civil servants, and the idea of the ‘general interest’, represented at the local level by the prefect, explain many of the distinctive features of the hybrid modernization reforms. In short, an analysis of the policy of modernization and its origin leads to conclusions which are highly consistent with new institutional explanations of policy making (Hall 1987)
This article examines the policy of Fifth Republic governments towards the modernization of the French civil service, with particular reference to the period since 1989. It has three main objectives. The first is to clarify the terms of the French debate about the crisis of the state, which is necessary to an understanding of the intellectual context of reform. The second is to describe and analyse the various strands of ‘administrative modernization’ policy. The third is to provide an interim assessment of the impact on the structure and culture of the civil service of what is an on-going programme of administrative reform. The origins and development of modernization policy are examined from a ‘regulationist’ perspective which emphasizes that modernization is intended to re-assert the legitimacy and effectiveness of state action, most notably by deconcentrating the manaement of public policies to the ‘local’ civil service.
This chapter provides a selective review of some contemporary approaches to program evaluation. One motivation for our review is the recent emergence and increasing use of a particular kind of “program” in applied microeconomic research, the so-called Regression Discontinuity (RD) Design of Thistlethwaite and Campbell (1960). We organize our discussion of these various research designs by how they secure internal validity: in this view, the RD design can been seen as a close “cousin” of the randomized experiment. An important distinction which emerges from our discussion of “heterogeneous treatment effects” is between ex post (descriptive) and ex ante (predictive) evaluations; these two types of evaluations have distinct, but complementary goals. A second important distinction we make is between statistical statements that are descriptions of our knowledge of the program assignment process and statistical statements that are structural assumptions about individual behavior. Using these distinctions, we examine some commonly employed evaluation strategies, and assess them with a common set of criteria for “internal validity”, the foremost goal of an ex post evaluation. In some cases, we also provide some concrete illustrations of how internally valid causal estimates can be supplemented with specific structural assumptions to address “external validity”: the estimate from an internally valid "experimental" estimate can be viewed as a “leading term” in an extrapolation for a parameter of interest in an ex ante evaluation.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
This paper empirically assesses the incidence and efficiency of Round I of the federal urban Empowerment Zone (EZ) program using confidential microdata from the Decennial Census and the Longitudinal Business Database. To ground our welfare analysis, we develop a heterogeneous agent general equilibrium model in which the distortions generated by place-based policies depend upon a set of reduced form elasticities which our empirical work centers on estimating. Using rejected and future applicants to the EZ program as controls we find that EZ designation substantially increased employment in zone neighborhoods, particularly for zone residents. The program also generated wage increases for workers from zone neighborhoods worth approximately $320M per year. Based upon estimates of the number of jobs created for zone residents, we find that EZ employment credits generated deadweight costs equal to (at most) seven percent of their flow cost.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
This paper is a statistical evaluation of the 1997 enterprise zone program in France. We investigate whether the program increased the pace at which unemployed workers residing in targeted municipalities and surrounding areas find employment. The work relies on a two-stage analysis of unemployment spells drawn from an exhaustive dataset over the 1993-2003 period in the Paris region. We first estimate a duration model stratified by municipalities in order to recover semester-specific municipality effects net of individual observed heterogeneity. These effects are estimated both before and after the implementation of the program, allowing us to construct variants of difference-in-difference estimators of the impact of the program at the municipality level. Following extensive robustness checks, we conclude that enterprise zones have a very small but significant effect on the rate at which unemployed workers find a job. The effect remains localized and is shown to be significant only in the short run.
Berlin is being remade as capital of a unified German nation state, just at the time when the role of nation states is being called into question by the claims of globalization, and the associated rise of global cities. The experience of Berlin suggests that it may be unhelpful to accept the world-city agenda as a universal template. Instead, it is necessary to explore the ways in which different agencies, companies and authorities negotiate the world around them, seeking to insert the city into pre-existing ideas and realities, as well as to influence and shape them, in what is best understood as a wider process of ‘worlding’.
The new edition of Ronald Miller and Peter Blair’s classic textbook is an essential reference for students and scholars in the input-output research and applications community. The book has been fully revised and updated to reflect important developments in the field since its original publication. New topics covered include SAMs (and extended input-output models) and their connection to input-output data, structural decomposition analysis (SDA), multiplier decompositions, identifying important coefficients, and international input-output models. A major new feature of this edition is that it is also supported by an accompanying website with solutions to all problems, wide-ranging real-world data sets, and appendices with further information for more advanced readers. Input-Output Analysis is an ideal introduction to the subject for advanced undergraduate and graduate students in a wide variety of fields, including economics, regional science, regional economics, city, regional and urban planning, environmental planning, public policy analysis, and public management.
During the past two decades, Swedish government policy has decentralized post-secondary education throughout the country. We investigate the economic effects of this decentralization policy on the level of productivity and innovation and their spatial distribution in the national economy. We find important and significant effects of this investment policy upon economic output and the locus of knowledge production, suggesting that the decentralization has affected regional development through local innovation and increased creativity. Our evidence also suggests that aggregate productivity was increased by the deliberate policy of decentralization. Finally, we estimate the spillovers of university investment over space, finding that they are substantial, but that they are greatly attenuated. Agglomerative effects decline rapidly; roughly half of the productivity gains from these investments are manifest within 5-8Â km of the community in which they are made.
This paper uses 2000 Census data to estimate the relationship of agglomeration and proximity to human capital to wages. The paper takes a geographic approach, and focuses on the attenuation of agglomeration and human capital effects. Differencing and instrumental variable methods are employed to address endogeneity in the wage–agglomeration relationship and also to deal with measurement error in our agglomeration and human capital variables. Three key results are obtained. First, the spatial concentration of employment within five miles is positively related to wage. Second, the benefits of spatial concentration are driven by proximity to college educated workers, an instance of human capital spillovers. Third, these effects attenuate sharply with distance.
This paper makes two contributions to the empirical literature on agglomeration economies. First, the paper uses a unique and rich database in conjunction with mapping software to measure the geographic extent of agglomerative externalities. Previous papers have been forced to assume that agglomeration economies are club goods that operate at a metropolitan scale. Second, the paper tests for the existence of organizational agglomeration economies of the kind studied qualitatively by Saxenian (1994). This is a potentially important source of increasing returns that previous empirical work has not considered. Results indicate that localization economies attenuate rapidly and that industrial organization affects the benefits of agglomeration.
We test the theoretical prediction that house prices respond more strongly to changes in local earnings in places with tight supply constraints using a unique panel dataset of 353 Local Planning Authorities in England ranging from 1974 to 2008. Exploiting exogenous variation from a policy reform, vote shares and historical density to identify the endogenous constraints-measures, we find that: i) Regulatory constraints have a substantive positive impact on the house price-earnings elasticity; ii) The effect of constraints due to scarcity of developable land is largely confined to highly urbanised areas; and iii) Uneven topography has a quantitatively less meaningful impact.This article is protected by copyright. All rights reserved.
Korea's public sector relocation: is it a viable option for balanced national development?, Regional Studies 41, 65-74. An empirical model combining economic, demographic, and migration models was built in order to analyse the effectiveness of public sector relocation plans for balanced national development. Five different relocation scenarios were tested. The major findings were as follows. First, relocating about 40 000 public sector jobs from the Seoul Metropolitan Region (SMR) to non-SMR regions (scenarios 2-5) is not sufficient to reverse the SMR population concentration trend by 2030. Second, relocating central governmental functions (9992 employees) to the Chungnam region has little impact on mitigating SMR population concentration and on attaining balanced national development. Third, the relocation plan proposed by the Korean government, which is scenario 2, alleviates the population concentration by decreasing the SMR population by 5.4%, but many non- capital regions lose their population because the numbers of public sector employees assigned to the non- SMR regions are not large enough to attract people to those regions. Fourth, and most importantly, relocating private firms with high inter-industry linkages is a better policy option for increasing the population in non- capital regions, and hence attaining balanced national growth, rather than moving public sectors.
We use new establishment-level data and geographic mapping methods to improve upon evaluations of the effectiveness of state enterprise zones, focusing on California's program. Because zone boundaries do not follow census tracts or zip codes, we created digitized maps of original zone boundaries and later expansions. We combine these maps with geocoded observations on most businesses located in California. The evidence indicates that enterprise zones do not increase employment. We also find no shift of employment toward the lower-wage workers targeted by enterprise zone incentives. We conclude that the program is ineffective in achieving its primary goals.
Marshall J. N., Bradley D., Hodgson C., Alderman N. and Richardson R. (2005) Relocation, relocation, relocation: assessing the case for public sector dispersal, Regional Studies 39 , 767-787. The paper assesses the case for public sector relocation from capital cities using evidence from Britain. The senior echelons of the British civil service are disproportionately concentrated in London. Significant reductions in operating costs can be achieved by relocating civil service functions from the capital, and these financial savings have been used to justify programmes of dispersal. However, the paper stresses the strong regional case for relocation; relocation contributes directly through employment creation to more balanced regional economic development and simultaneously reduces overheating close to the capital and the under-utilization of infrastructure and human resources in other regions. The relocation of more senior jobs in the civil service from London strengthens the service base within problem regions. The highly centralized and strongly hierarchical nature of the civil service, combined with the buoyancy of the private sector near the capital, acts as a brake on staff mobility and the effective national deployment of staff in the civil service. Public service relocation is increasingly being used by government to facilitate modernization by using relocation as a catalyst to bring in new business practices. However, there is less of a willingness on the part of government to connect relocation with flatter forms of more devolved governance.
Uses case study evidence from a Civil Service related organization considering relocation to consider the impact on the regions of England of the recent round of Civil Service dispersal from London and the South East. It is based on a cost benefit analysis of the main operating costs of the unit considering relocations, at both its current London base and a number of lower cost locations in the provinces. An investigation of the likely impact of a move on the functioning of the unit relocating and the likely local property and labour market conditions it might face in selected lower cost locations are used to consider the more qualitative aspects of relocation. Decentralization of the Civil Service is likely to favour selected lower cost locations between the North Midlands and South Yorkshire. This suggests that the economics of relocation from the capital have stretched since the 1960s and 1970s. -from Authors
Goddard J. B. and Pye R. (1977) Telecommunications and office location, Reg. Studies , 11, 19--30. The paper briefly reviews the role of communications in office location decisions and the possible effects of relocation on business contacts. These effects are elaborated by reference to surveys of office communications patterns in different locational situations. A simple model is introduced in which the communications costs of possible decentralized locations are compared to potential savings, particularly office rents and clerical wages. The possible impact of telecommunications on the interaction between locations and communications is also considered in the model. The paper concludes with a discussion of public policies concerning advanced telecommunications systems.
In this paper an extended Keynesian regional multiplier model is developed and used to estimate the local impact of two proposed (but subsequently cancelled) moves in the UK programme of Government office dispersal. These moves were to have been the relocation of the Property Services Agency to Cleveland and part of the Ministry of Defence to the county of south Glamorgan. The multiplier formulation explicitly takes into account an important feature of Government office dispersal, that is, that a large proportion of the employees move with the job. The importance of the first round in the multiplier process is stressed, and quantitative estimates of the effects of varying the nature of the initial injection are given.
Should the national government undertake policies aimed at strengthening the economies of particular localities or regions? Agglomeration economies and human capital spillovers suggest that such policies could enhance welfare. However, the mere existence of agglomeration externalities does not indicate which places should be subsidized. Without a better understanding of nonlinearities in these externalities, any government spatial policy is as likely to reduce as to increase welfare. Transportation spending has historically done much to make or break particular places, but current transportation spending subsidizes low-income, low-density places where agglomeration effects are likely to be weakest. Most large-scale place-oriented policies have had little discernable impact. Some targeted policies such as Empowerment Zones seem to have an effect but are expensive relative to their achievements. The greatest promise for a national place-based policy lies in impeding the tendency of highly productive areas to restrict their own growth through restrictions on land use.
We develop a new empirical approach to identify tradable service activities. Contrary to conventional views of service activities as nontradable, we find a significant number of service industries and occupations that appear tradable and substantial employment in these tradable activities. Workers employed in tradable service activities differ from those employed in tradable manufacturing and nontradable services. Workers in tradable service activities have higher skill levels and are paid higher wages than manufacturing workers or workers in nontradable service activities. In general, we find little evidence that tradable service activities have lower employment growth than other service activities. However, evidence suggests lower employment growth at the lowest end of the skill distribution. There is also evidence of higher worker displacement rates in tradable services. Workers displaced from tradable service activities are different from displaced manufacturing workers: Displaced tradable service workers have higher skills and higher predisplacement earnings than displaced manufacturing workers.
This paper examines the effect on productivity of having more near advertising agency neighbors and hence better opportunities for meetings and exchange within Manhattan. We will show that there is extremely rapid spatial decay in the benefits of having more near neighbors even in the close quarters of southern Manhattan, a finding that is new to the empirical literature and indicates our understanding of scale externalities is still very limited. The finding indicates that having a high density of commercial establishments is important in enhancing local productivity, an issue in Lucas and Rossi-Hansberg (2002), where within business district spatial decay of spillovers plays a key role. We will argue also that in Manhattan advertising agencies trade-off the higher rent costs of being in bigger clusters nearer “centers of action”, against the lower rent costs of operating on the “fringes” away from high concentrations of other agencies. Introducing the idea of trade-offs immediately suggests heterogeneity is involved. We will show that higher quality agencies are the ones willing to pay more rent to locate in greater size clusters, specifically because they benefit more from networking. While all this is an exploration of neighborhood and networking externalities, the findings relate to the economic anatomy of large metro areas like New Yorkthe nature of their buzz.
This paper studies the advertising agency industry in Manhattan to infer networking benefits among agencies in close spatial
proximity. We use economic census data that allow us to distinguish locations at a fine level of geographic detail, so as
to infer the strong effect on productivity of having more near advertising agency neighbours. Paying close attention to identification
issues, we show, however, that there is extremely rapid spatial decay in the benefits of more near neighbours, even in the
close quarters of southern Manhattan, a finding that is new to the literature. This suggests that high density of similar
commercial establishments is important in enhancing local productivity for those industries found in large cities, where information
sharing plays a critical role. Our results indicate that the benefits of more near neighbours are largely capitalized into
rents rather than wages, challenging an existing literature, which estimates wage equations alone to infer agglomeration benefits.
To identify relative wage impacts of immigration, we make use of licensing requirements in the Norwegian construction sector that give rise to exogenous variation in immigrant employment shares across trades. Individual panel data reveal substantially lower wage growth for workers in trades with rising immigrant employment than for other workers. Selective attrition from the sector masks the causal wage impact unless accounted for by individual fixed effects. For low and semi-skilled workers, effects of new immigration are comparable for natives and older immigrant cohorts, consistent with perfect substitutability between native and immigrant labor within trade. Finally, we present evidence that immigration reduces price inflation, as price increases over the sample period were significantly lower in activities with growth in the immigrant share than in activities with no or small change in immigrant employment.
Estimating the effects of government office dispersal
- Ashcroft
Ashcroft, B., Swales, J.K., 1982b. Estimating the effects of government office dispersal.
Reg. Sci. Urban. Econ. 12, 81-98.
The public sector workforce: past, present and future, Institute for Fiscal Studies Briefing Note BN145
- J Cribb
- R Disney
- L Sibieta
Cribb, J., Disney, R. Sibieta, L., 2014. The public sector workforce: past, present and future,
Institute for Fiscal Studies Briefing Note BN145.