The actual effects of official settlements have hardly been researched so far. Economist Potrafke says, “There are only a few studies that, to put it simply, have come to the conclusion that for every job in the public sector the establishment or transfer of one authority creates another job in the private sector.”
However, the previous studies that Potrafke and his team analyzed have only examined individual settlements and are often based on data from overseas. They can therefore be transferred only to a limited extent to other and current affairs, such as the establishment of federal institutions in central Germany.
We’ll have to research for a few more years before we can make a credible statement.
It is also unclear whether the people working in the newly established federal institution actually live in the region, or whether they instead travel or work from home and the expected economic impact is correspondingly less. In their study, Potrfke and his team examined two cases in detail: the transfer of a Bavarian state authority and the transfer of a branch of the Federal Office for Economics and Export Control in Weiwasser. At least in these two cases, says Potrafke, care is taken primarily to employ people in the area, not to strengthen pendulum structures.
In the study by Niklas Potrafke’s team, transferring an authority proved to be a more difficult undertaking than relocating. “In a relocation situation, unstable employees and, consequently, falling productivity appear to be a problem,” Potrafke says. On the other hand, when relocating, the biggest challenge is finding suitable personnel for management positions, especially in areas away from major cities.
The decision of which institution should be located where is usually made behind closed doors. The criteria applied to the researchers working with Niklas Potrafke are also unclear. On the one hand, Potrafke says, there should be a list of requirements that relate to the capacity of skilled workers, infrastructure and unemployment in potential settlement areas.
But it is also certain that not only objective criteria are used in the decision, but political motives play a role in most settlements and resettlements. “For example, if there is a mayor, a member of the state parliament or a member of the Bundestag from the region, who drives the campaign for settlement to the next level, that is an important factor,” Potrafke says.