11 August 2016

CityLab: Would Germany Be Wealthier if Berlin Didn't Exist?

Before we look at why Germany’s figures skew differently, it’s worth looking more fully at the figures the report provides. They don’t, for instance, actually suggest any inherent relation between the size of a capital’s contribution to national GDP and the overall prosperity of a country. Of all capitals surveyed, it’s actually Athens that shows the greatest national dominance. If that city and its habitants were removed from national figures, then Greece’s GDP per capita would drop by 19.9 percent. The Paris region shows similar levels of national contribution: its absence would slash French per capita GDP by 15 percent. In the U.K., no London would mean a drop of 11.2 percent in per capita GDP. A Madrid-free Spain’s per capita GDP would drop by 6 percent, while even Rome—known for playing second fiddle to the economic powerhouse of the North Italian Plain—would cause Italy’s per capita GDP to drop 2.1 percent if it were removed from the country’s economy.

It’s only in Berlin that these figures appear to suggest Germany would actually be better off without it. Removing Berlin and its residents from German economic tallies would, according to the report, actually boost the country’s per capita GDP, albeit by a meager 0.2 percent. [...]

Does all that mean the city is failing to pull its weight? Not necessarily. While the cost of running Germany’s Berlin-based government are high, so are the benefits that effective government reaps—they just happen to be reaped elsewhere in Germany rather than in the city itself. Having a capital evenly split between the former eastern and western sectors has been invaluable in making reunification smoother, while Berlin’s boost to its country’s international prestige is huge. Without Berlin, Germany would likely be damned outside its borders as a boring, conservative place, a broad-brush stereotype that’s still not entirely without foundation. The rest of Germany may be contributing to keeping Berlin afloat rather than vice versa, but when you think about it, they’re still getting a pretty good deal.

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