Capital Cities in Interurban Competition: Local Autonomy, Urban Governance, and Locational Policy Making

Abstract

Capital cities are government cities that tend to lack a competitive political economy. Especially secondary capital cities—defined as capitals that are not the primary economic centers of their nation-states—are pressured to increase their economic competitiveness in today’s globalized interurban competition by formulating locational policies. This article compares the locational policies agendas of Bern, Ottawa, The Hague, and Washington, D.C. The comparison reveals that (1) secondary capital cities tend to formulate development-oriented locational policies agendas, (2) local tax autonomy best explains the variance in locational policies agendas, and (3) secondary capital cities possess urban governance arrangements where public actors dominate and where developers are the only relevant private actors. The challenge for secondary capital cities is to formulate locational policies that enable them to position themselves as government cities, as well as business cities, while not solely relying on the development of their physical infrastructure.