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The Regional Economic Effects of Military Base Realignments and Closures in Germany

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  • Paloyo, Alfredo R.
  • Vance, Colin
  • Vorell, Matthias

Abstract

Within the context of the current political discussion over base realignments and closures (BRACs) in Germany, this study provides policy guidance by examining the economic consequences to the surrounding community. We identify the causal effect of a reduction in military personnel on a number of socioeconomic indicators within the peripheries of military bases. The BRACs within the German armed forces is used an exogenous source of variation that allows for the estimation of the causal effect of a particular demand shock on household income, output, unemployment, and tax revenue within a specified buff er zone around each base. The analysis covers 298 communities for the period 2003-2007. Consistent with evidence found elsewhere, we find that these base adjustments have only a marginal impact on the local community in which the bases are located.

Suggested Citation

  • Paloyo, Alfredo R. & Vance, Colin & Vorell, Matthias, 2010. "The Regional Economic Effects of Military Base Realignments and Closures in Germany," Ruhr Economic Papers 181, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    • Handle: RePEc:zbw:rwirep:181
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    1. Patrick E. Poppert & Henry W. Herzog Jr., 2003. "Force Reduction, Base Closure, and the Indirect Effects of Military Installations on Local Employment Growth," Journal of Regional Science, Wiley Blackwell, vol. 43(3), pages 459-482, August.
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    4. Catherine Hill, 2000. "Measuring Success in the Redevelopment of Former Military Bases: Evidence from a Case Study of the Truman Annex in Key West, Florida," Economic Development Quarterly, , vol. 14(3), pages 267-277, August.
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    Cited by:

    1. Ginevra Balletto & Alessandra Milesi & Nicolò Fenu & Giuseppe Borruso & Luigi Mundula, 2020. "Military Training Areas as Semicommons: The Territorial Valorization of Quirra (Sardinia) from Easements to Ecosystem Services," Sustainability, MDPI, vol. 12(2), pages 1-20, January.
    2. Camerin, Federico & Gastaldi, Francesco, 2018. "Italian military real estate assets re-use issues and opportunities in three capital cities," Land Use Policy, Elsevier, vol. 78(C), pages 672-681.
    3. Alfredo Paloyo & Colin Vance & Matthias Vorell, 2014. "Local determinants of crime," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 31(21), pages 625-658.
    4. Josselin Droff & Alfredo R. Paloyo, 2015. "Assessing The Regional Economic Impacts Of Defense Activities: A Survey Of Methods," Journal of Economic Surveys, Wiley Blackwell, vol. 29(2), pages 375-402, April.
    5. Brau, Rinaldo & Statzu, Vania, 2017. "The economic enhancement of military sites and landscapes: what are the lessons of international practice?," MPRA Paper 98570, University Library of Munich, Germany.
    6. José R. García & Joaquín Murillo & Jordi Suriñach & Esther Vayá, 2018. "Economic impact of the ministry of defence’s budget: methodological design and results for the Spanish economy," Defence and Peace Economics, Taylor & Francis Journals, vol. 29(4), pages 459-473, June.
    7. Philipp Breidenbach, 2015. "Expansions of Regional Airports and their Effect on the Local Economy," ERSA conference papers ersa15p1196, European Regional Science Association.
    8. Stanislaw Sirko & Marzena Piotrowska-Trybull & Henryk Wojtaszek, 2020. "Application of Text Mining in the Analysis of Relations between Military Units and Local Government Units," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 430-447.
    9. Stanisław Sirko & Jarosław Kozuba & Marzena Piotrowska-Trybull, 2019. "The Military’s Links with Local Communities in the Context of Sustainable Development," Sustainability, MDPI, vol. 11(16), pages 1-11, August.
    10. Gathmann, Christina & Helm, Ines & Schönberg, Uta, 2014. "Spillover Effects in Local Labor Markets: Evidence from Mass Layoffs," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100378, Verein für Socialpolitik / German Economic Association.
    11. Marzena Piotrowska-Trybull & Maria Jablonska-Woloszyn, 2020. "Assessment of Services Rendered by a Public Organization to the Citizen: The Perspective of Security in Peacetime," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 623-637.
    12. Breidenbach, Philipp, 2020. "Ready for take-off? The economic effects of regional airport expansions in Germany," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 54(8), pages 1084-1097.
    13. Dahlberg, Matz & Martén, Linna & Öckert, Björn, 2021. "Who recovers from a job loss? The importance of cognitive and non-cognitive skills," Working Paper Series 2021:2, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    14. Marzena Piotrowska-Trybull & Stanislaw Sirko, 2020. "Military Units as Elements of Development Potential of Small and Medium-Sized Cities," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 2), pages 200-219.
    15. David, Sandberg, 2024. "The Effect of Military Base Closures on Young Adults," Working Papers 2024:9, Lund University, Department of Economics.

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    More about this item

    Keywords

    Geographic information system; armed forces; regional adjustment;
    All these keywords.

    JEL classification:

    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • R19 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Other

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