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Can Kings Create Towns that Thrive? : The long-run implications of new town foundations

L. Cermeño, Alexandra LU orcid and Enflo, Kerstin LU orcid (2018) In Discussion Paper
Abstract
Town foundations have been at the core of urban planning since the onset of civilization. This paper describes the long-run impact of an urbanization place-based policy that was considered a failure by contemporary policymakers. We test the impact of founded towns using a series of town foundations that took place between 1570 and 1810, when the Swedish Crown conferred monopoly market rights to trade upon 31 previously rural ordinary parishes. We show that towns were founded in locations with little natural potential, evident in their limited impact on agricultural surplus in the surrounding hinterlands. However, the new foundations drove extensive growth in terms of population and created positive spillover effects up to 40-50 km around... (More)
Town foundations have been at the core of urban planning since the onset of civilization. This paper describes the long-run impact of an urbanization place-based policy that was considered a failure by contemporary policymakers. We test the impact of founded towns using a series of town foundations that took place between 1570 and 1810, when the Swedish Crown conferred monopoly market rights to trade upon 31 previously rural ordinary parishes. We show that towns were founded in locations with little natural potential, evident in their limited impact on agricultural surplus in the surrounding hinterlands. However, the new foundations drove extensive growth in terms of population and created positive spillover effects up to 40-50 km around the settlements. Still, the founded towns remained extraordinarily small by the end of the policy period. It was not until the Industrial Revolution that these towns began to thrive. We suggest that trading rights and sunk investments initially served to coordinate expectations about future growth. Once the towns started to grow, agglomeration effects generated persistence in the long term. (Less)
Please use this url to cite or link to this publication:
author
and
organization
publishing date
type
Working paper/Preprint
publication status
published
subject
keywords
Economic Geography, economic history, path dependency, Urbanization, agricultural surplus
in
Discussion Paper
issue
13392
pages
40 pages
publisher
Centre for Economic Policy Research (CEPR)
project
The evolution regional economies in the Nordic region – A long run approach
language
English
LU publication?
yes
id
deb8b8f4-3eb2-4fe3-bbf4-b14a4c0160c1
alternative location
https://cepr.org/active/publications/discussion_papers/dp.php?dpno=13392
date added to LUP
2018-12-13 13:42:22
date last changed
2021-12-05 02:15:49
@misc{deb8b8f4-3eb2-4fe3-bbf4-b14a4c0160c1,
  abstract     = {{Town foundations have been at the core of urban planning since the onset of civilization. This paper describes the long-run impact of an urbanization place-based policy that was considered a failure by contemporary policymakers. We test the impact of founded towns using a series of town foundations that took place between 1570 and 1810, when the Swedish Crown conferred monopoly market rights to trade upon 31 previously rural ordinary parishes. We show that towns were founded in locations with little natural potential, evident in their limited impact on agricultural surplus in the surrounding hinterlands. However, the new foundations drove extensive growth in terms of population and created positive spillover effects up to 40-50 km around the settlements. Still, the founded towns remained extraordinarily small by the end of the policy period. It was not until the Industrial Revolution that these towns began to thrive. We suggest that trading rights and sunk investments initially served to coordinate expectations about future growth. Once the towns started to grow, agglomeration effects generated persistence in the long term.}},
  author       = {{L. Cermeño, Alexandra and Enflo, Kerstin}},
  keywords     = {{Economic Geography, economic history, path dependency, Urbanization, agricultural surplus}},
  language     = {{eng}},
  month        = {{12}},
  note         = {{Working Paper}},
  number       = {{13392}},
  publisher    = {{Centre for Economic Policy Research (CEPR)}},
  series       = {{Discussion Paper}},
  title        = {{Can Kings Create Towns that Thrive? : The long-run implications of new town foundations}},
  url          = {{https://cepr.org/active/publications/discussion_papers/dp.php?dpno=13392}},
  year         = {{2018}},
}