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Urban Sprawl is a major issue in many countries. Specifically in my country (Switzerland) it is such an issue that truly rural areas (where a majority of people don't go to a town every day to work) are in danger of disappearing entirely. Rural villages that are close to a town get more houses built, and turn into semi-rural villages. At which point many of them turn completely into suburbs, with some farms and fields remaining among huge waves of individual houses. In some cases it is not even rare to see some old farms surrounded by a dozen tall blockhouses; in the worst cases even their gardens were destroyed and only the old buildings themselves remain (because they are protected by law).

Back in the middle ages, when the cities' borders were defined by tall defence walls, it was very clear where the city stopped. Nowadays the limit is extremely broad.

There are still administrative borders. When the only limiting factor is a change of municipality, it is extremely tempting for a rural municipality that is near a town to let urban people build their houses there, as it brings a lot of taxes into the municipality's funds (and I mean, a lot, when ecologists support laws to ban such builds, it's not unheard off that they be target of terrorist attacks from property developers, that is usually supported by the municipalities themselves).

Such a process is usually reported as a good term of development instead of being reported as a bad term of destruction of the natural and rural environment which also takes place.

Once villages grow up into suburbs, in some countries it is common for them to dissolve their municipalities and be absorbed into the city. In Switzerland it is not -- this is why the cities show much smaller numbers of inhabitants in the statistics despite the cities not being much smaller (since the suburbs are not included when counting the inhabitants).

Now, what if cities are bounded by a more important border, such as a state border? What comes to mind is the city-states, such as Hamburg, Berlin and Bremen in Germany, Basel in Switzerland, or Hong-Kong and Macau (somewhat) in China. Does such a state border prevent the neighbouring rural territories (such as the Brandenburg around Berlin) from becoming soulless and endlessly exponentially expanding suburbs, or does it have absolutely no effect?

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    This is reading a bit like a rant and therefore is somewhat open to interpretation, but I think we could answer the part about urban areas vs. state's borders. There's a lot of evidence that borders aren't all that big of an impediment to regions where there is a lot of economic activity in often metropolitan expanses. Example: en.wikipedia.org/wiki/Cross-border_region – user1530 Jul 19 '15 at 19:46
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    That really depends on the country and how the rights between communes and (city-) states are divided. – Philipp Jul 19 '15 at 21:29
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Now, what if cities are bounded by a more important border, such as a state border? What comes to mind is the city-states, such as Hamburg, Berlin and Bremen in Germany, Basel in Switzerland, or Hong-Kong and Macau (somewhat) in China. Does such a state border prevent the neighbouring rural territories (such as the Brandenburg around Berlin) from becoming soulless and endlessly exponentially expanding suburbs, or does it have absolutely no effect?

I can't speak to the European and Asian examples, but the US has examples similar to Berlin and Brandenburg. Some examples:

New York City has suburbs in Connecticut and New Jersey, as well as in New York State.

Philadelphia has suburbs in New Jersey, Delaware, and Maryland, as well as in Pennsylvania.

Boston has suburbs in New Hampshire, as well as Massachusetts. Defined extensively enough, Rhode Island and Connecticut as well.

Washington, D.C. is similar to Berlin (an entirely urban province) and has suburbs in both Virginia and Maryland. Note that the District of Columbia was formed from Virginia and Maryland. Part of the Virginia side was returned to Virginia.

Kansas City is in both Kansas and Missouri and has suburbs in both.

Chicago has suburbs in Indiana as well as Illinois.

Portland has suburbs in Washington as well as Oregon.

Weirton and Steubenville have suburbs in West Virginia, Ohio, and Pennsylvania.

In the US, these are called metropolitan statistical areas, which Wikipedia describes as follows

The OMB defines a Metropolitan Statistical Area as one or more adjacent counties or county equivalents that have at least one urban core area of at least 50,000 population, plus adjacent territory that has a high degree of social and economic integration with the core as measured by commuting ties.

The US also has some cities that are adjacent to cities in other countries. For example, Niagra Falls, New York (and Canada) and Calexico, California (and Mexicali, Mexico). I do not believe that there is significant cross border commuting though. I suspect that such commuting is easier in Europe where migration is less restricted.

So unless the border is enforced such that travel across it is restricted, I don't believe that borders are significant barriers to urban sprawl. Even when enforced, note that sister cities can arise. People congregate at one city to ease transport of goods or tourists across the border.

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