Institutional fragmentation and urbanization in European Union cities

ABSTRACT

The relationship between institutional fragmentation and the spatial extent of cities in Europe’s functional urban areas is examined. European Union planning regulations vary across member states, but in most cases local authorities determine land use within the more general regulatory frameworks set by national or subnational authorities. More decentralized and fragmented settings may favour urban sprawl, allowing developers to avoid land-use restrictions in one municipality by moving to adjacent ones and providing incentives for municipalities to adopt less strict land-conversion regulations to attract households and workers. The empirical results fully support this hypothesis and unveil significant differences between small and large cities, the effect of governance fragmentation being a substantial factor in the latter case.

KEYWORDS:

• urban sprawl
• institutional fragmentation
• threshold regression

JEL:

• C24
• R52
• R58

ACKNOWLEDGEMENTS

The authors thank the editor and two anonymous referees for their valuable criticisms and suggestions to earlier drafts of the paper.

DISCLOSURE STATEMENT

No potential conflict of interest was reported by the authors.

Notes

1. Musgrave (1939) and Samuelson (1954) give consumer–voter’s preferences, and the central government adjusts the revenue and expenditure pattern to the preferences. At the local level, the municipalities’ revenue and expenditure patterns are given, and the consumer–voter chooses the municipality that best fits their set of preferences.

2. In contrast, strong evidence exists of tax-mimicking among neighbouring municipalities (Bocci et al., 2017).

3. The CEC (1997) defines spatial planning systems as ‘the various institutional arrangements for expressing spatial planning objectives and the mechanisms employed for realizing them’.

4. According to the CLC classification, the aggregate ‘1-Urban Area’ comprises all artificial surfaces, including urban fabric, industrial, commercial and transport units, mine, dump and construction sites, and artificial non-agricultural vegetated areas.