A study of the authorities in rural areas

The actual effects of the official settlements have not yet been researched. “There are only a few studies that have, quite simply, come to the conclusion that the creation or transfer of power creates another job in the private sector for every job in the public sector,” says economist Putravki.

However, previous studies that Putravki and his team analyzed have examined only individual settlements and are often based on data from abroad. Thus it can only be transferred to a limited extent to other and current issues, such as the establishment of federal institutions in central Germany.

It is also unclear whether people working in a newly established federal institution actually live in the area, or whether they instead commute or work from home and the correspondingly expected economic impacts are smaller. In their study, Putravke and his team studied two cases in detail: the transfer of Bavarian state authority and the transfer of the Weisswaser branch of the Federal Office for Economics and Export Control. At least in these two cases, says Putravki, care is taken to hire mostly people from the region and not to strengthen the pendulum structures.

In the study by Niklas Putravke’s team, it was found that transferring power was a more difficult task than moving. “In the case of relocation, precarious employees and, as a consequence, low productivity appear to be a problem,” Putravki says. When relocating, on the other hand, the biggest challenge is finding suitable employees for managerial positions, especially in areas far from major cities.

The decision as to which institution should be based is usually made behind closed doors. The criteria applied are also unclear to researchers working with Niklas Potrafke. On the other hand, there should be an index of requirements that deal with the potential of skilled workers, infrastructure and unemployment in potential settlement areas, says Putravke.

But it is also certain that not only objective criteria are used in the decision, but that political motives play a role in most settlements and resettlement processes. “If there is, for example, a mayor, a member of the state parliament or a member of the Bundestag from the region, who is campaigning for a settlement at the next level, that is an important factor,” Putravke says.