Development of Cities in the Baltic Sea Region: Some Empirical Observations and Implications for Urban Governance

Abstract

The aim of this article is to reflect on some macro regional observations about the devel- opment of cities in the Baltic Sea Region in order to provide some evidence on policy sensitive aspects, such as remaining north-south, east-west divide within the region in terms of demographic, economic, transport, human capital and social indicators. The observations are based on the study that examines the development of 127 cities of the Baltic Sea Region (BSR) from 2005 to 2014. Research shows that economic development has lead to quick spatial expansion of most urban areas. While cities obviously generate growth and jobs, perform good on educational front and innovation front, development differences across the Western-Eastern axis are still showing. After the financial crisis of 2008-09 public investment dropped substantially relative to GDP. Poverty, and closely related issues, such as housing is becoming more pressing issue in urban development. In order to address these issues urban governance needs to consider growing discrepancy between administrative definitions of cities and their true size, negative effects of tax competition, spatial aspects of social and economic inequalities as well as double hierar- chy of administrative and functional levels of governance.