There are many reasons to believe that Luxembourg is an “exceptional” country. The numbers are telling. According to Eurostat, for the period 2009-2017 alone, Luxembourg increased its population by a staggering 19.67% –far above the growth experienced by the neighboring Germany (a negligible 0.6%), France (4.1%) or Belgium (5.57%). There are other cases were the magnitude of Luxembourg’s growth nullifies any rationale for making international comparisons. It was our desire to better understand this “exceptionality” of Luxembourg that led us to undertake this research. Is Luxembourg’s “fate” to remain an outlier in most international comparisons or are there reasons to believe that other, comparable cases might emerge if we change the level of the analysis?
The most obvious “change of focus” would be to compare Luxembourg with other small states, instead of countries like Germany or France. We argue that even this category of “small states” remains problematic and obscures rather than facilitates comparisons. A national “economy” is a complex phenomenon, especially in an era of globalization and high capital mobility. It is not just about the transactions of economic agents since these transactions do not happen in a vacuum. They take place in a very specific setting that is determined, inter alia, by each nation’s institutional arrangements, the prevailing political culture and, as in the case of Luxembourg, the participation in international or regional organizations like the WTO and the EU/EMU, and the impact that this participation has on the domestic governance. One cannot group together the economies of the post-communist Baltic States (like Estonia and Lithuania) that adopted parliamentarism only in the 90s or Balkan states (like Montenegro), with highly advanced countries (both economically and technologically), like Luxembourg, that have a long established history of parliamentarism. The differences on their stages of development, and their social and political governance are too great to ignore. The “right” grouping of countries is always a highly controversial issue, not only for small states. Given the limited cases available, an ideal grouping is like the Quest for the Holy Grail –it may never appear. Nonetheless, we should always be in a position to justify our choices. One could make the argument that a comparison between Malta and Luxembourg (that could potentially include Cyprus as well) is not that arbitrary. One should not overlook the fact however, that Malta (and Cyprus) are island-states and so they face structurally different challenges (like the risk of being isolated), something that clearly does not apply to Luxembourg, a geographically landlocked country with a workforce consisted (by almost 50%) by cross-border workers.
Our proposed research, based on studies as the METROBORDER report, attempts a comparison between Luxembourg and European metropolises, instead of states. By using a set of four indicators, namely, population growth, dynamics of job creation and evolution of the GDP – GDP/capita, we aim to uncover some hidden socio-economic dynamics that would help us place Luxembourg’s extraordinary performance into perspective.
Table : Population growth
The point to which we would like to draw attention to is that when we start treating (and comparing) Luxembourg as a city (and to cities) we see that the Grand Duchy stops being such an “exceptional” case and other, comparable cases emerge, at least in terms of the main socio-economic indicators.
It should be noted that our research does not aim at being exhaustive (far from it). It serves much more as a suggestion for future research on a topic that, to the best of our knowledge, has not attracted enough attention thus far and has the potential of uncovering hidden socio-economic dynamics. At the same time, it will help “re-attach” Luxembourg (that will stop being such an outlier) to the trend of conducting international comparisons with the prospect of identifying best practices and policy recommendations.