The Public Investment Crisis: A Local-Level Investigation

Leon Wansleben

Escalating housing costs; water and sewage systems overburdened by increasingly volatile weather conditions; and mobility infrastructures producing pollution and monopolizing public space: cities are confronted with a mounting challenge to overcome the paucity of public investments. The situation is particularly severe in Germany, where municipal capital stocks have been decreasing in value over the past decades. At the same time, especially in less prosperous regions, cities are facing a public funding shortage and decreasing taxing power. Their regular spending can often only be financed through loan issuance, leading to growing mountains of debt. This project aims to investigate the dual crisis of reduced public investments and fiscal shortfall. Research particularly focuses on how political and administrative processes on the local level are affected by the dual crisis and how they contribute to aggravating or potentially mitigating broader structural problems. The cases selected for this project are Cologne, Lyon, and Manchester, which are investigated using diverse methods: analyses of cities’ budgets; indicators for longer-term path dependencies (e.g., changing compositions of political and administrative bodies); and participant observations and interviews. Project duration: October 2019 to September 2022.