Political Institutions, Federalism and Urban Development: Evidence from the US and Canada

In this paper, we examine the comparative effect of US and Canadian federalism on urban development using the differential impact of political capitals on city population. In the US, the Jeffersonian-Jacksonian tradition of states rights and localism was transformed into a more nationally centralized form of federalism during the Progressive Era, but states and localities continued to retain significant autonomy. In Canada, on the other hand, federalism came to favor provincial rights but not localism. Consistent with these trends, after controlling for other factors like geography and climate that influence population agglomeration, the national capital effect on population grew over time in both countries but much more so in the US whereas the subnational (i.e. state or provincial) capital effect rose much more significantly in Canada than in the US.