Strategies to Cope with Shrinkage in the Lower End of the Urban Hierarchy in Estonia and Central Germany

Population shrinkage has become an unavoidable process in many cities and calls for new planning approaches. Typically, economic restructuring causes small urban centres in peripheral locations to lose economic functions and population. In small towns however, social capital has been considered as a specific resource. In this article, we focus on small postsocialist towns in Estonia and Central Germany that have mostly experienced severe shrinkage since the end of state socialism, especially during the first transition decade. We aim to clarify to what extent local planning strategies accept the ongoing shrinkage and how various forms of local social capital have contributed to these strategies and the development of the localities in general. Interviews with different stakeholders in selected towns in Estonia and Germany revealed that shrinkage has not been systematically accepted in local planning. Instead, planning is strongly steered by the external financial resources to strengthen the remaining urbanity. In all towns, specific key development niches have been found in the 2000s to compensate for the peripherality. We also demonstrate that local public institutions need to adjust their governance culture to the existing specific local forms of social capital in order to achieve synergy between local actors.