How administrative degradation affects middle-sized cities: lessons from Poland's 1998 regional reform

Among Polish cities facing socioeconomic difficulties are the former regional capitals which lost their administrative status due to the 1998 reform, reducing the number of regions. Making use of this quasi-experimental setting, we assess the impact of the loss of administrative status on the affected cities with difference-in-differences estimations. Our findings show the negative impact of the regional amalgamation on economic and, to a lesser extent, on other dimensions of local development. We identify the reform's contribution to the growing disparity between the second-tier and the largest cities and reflect on the design of place-based compensatory measures.