Political Centralization, Federalism, and Urbanization: Evidence from Australia

Abstract

The dominance of capital cities (urban primacy) is an enduring characteristic of Australian states. There has been limited empirical research examining the drivers of primacy in states despite some being extreme examples of the phenomenon, both in magnitude and scale. In light of institutional theories of settlement patterns, we developed a profile of Australian urbanization using a century of time-series data, descriptive statistics, and an empirical model of city populations. In Australian states high measures of primacy have endured with little evidence of disruption despite the enormous size of these states, their wealth, and population growth – factors associated with declining and low primacy. Statistically, state capital city status has a significant effect on city population size variation, with results suggesting primacy in states is in part a product of Australian federalism. This contrasts with views that suggest Australia’s scarcity of large non-capital cities is due to isolation, low population, and environmental determinism. The findings in this paper have major implications relative to national and/or state strategies that aim to decentralize population away from the primate cities.

Future‐proofing a local government authority for a post‐mining future

“…By adopting this strategy to secure OSR and build a “future fund,” the Shire will likely be penalised by the other two tiers of government through the allocation of grants. This is because of the government’s commitment to horizontal fiscal equalisation; a federal transfer system to redress federal dominance, flatten interstate differences, and continuously improve the fairness of transfers (McLean, 2004; Wilkinson et al, 2023). Hence, the more the Shire of Coolgardie builds its corpus of OSR, the less inclined the state and federal governments will be to allocate the maximum funds to the Shire based on population, dependency, and demonstrated infrastructure shortfalls.…”