Local Government Reforms in Germany

Seminar Paper, 2007

21 Pages, Grade: A



1 Introduction

2 The United Kingdom
2.1 Government Structure
2.2 NPM Reform Endeavors
2.2.1 NPM Influences on Local Governments

3 German Government System

4 Local Reforms in Germany
4.1. Participatory revolution in the 1960s and 1970s
4.2. Incremental Change in the 1980s
4.3. Wave of Changes in the 1990s

5 Reasons for Local Reform
5.1. Incrementalist Reform Efforts
5.2.Delayed NSM Reforms

6 Influences for NPM Style Reform
6.1. The Dutch Reform Paradigm
6.2. National Advocates

7 Differences in Implementation

8 Conclusion


1 Introduction

While frontrunners like the United Kingdom (UK) under Thatcher, the United States under Reagan and the New Zealand began New Public Management (NPM) reforms in the 1980s, Germany’s federal government level only showed movement toward modernization in the late 1990s, and efforts still have not gone far enough to be evaluated with confidence. The minimal restructuring that has taken place in the federal government has occasionally been attributed to the constraining nature of the Rechtsstaat system, which requires modification in law for any kind of management changes (Pollitt, Bouckaert 2004:53, 97). In contrast to the federal government, local authorities in Germany have been quite active in the last 10 to 15 years readjusting themselves, and have for example undertaken managerial reforms, restructured their service providing utilities, engaged in ventures with private businesses, or privatized parts of their services (Reichard 2006:477). Therefore, the most notable government reforms were, undertaken by the local governments, which engaged in incremental reforms in the 1980s, and only began engaging in NPM after a ten-year delay in the 1990s (Schröter et al 1997: 190), when the UK and other countries had started concentrating government reform efforts on engaging multi-stakeholder networks through local and public governance measures.

Focusing on the local level of government I attempt to explain the puzzle as to why Germany was a decade behind in adopting NPM measures, and why the initiative to reform public management started primarily at the local level and remains mainly limited to the local level of government. Subsequently, the purpose of this paper is to illustrate to what extent local government reforms in Germany vary from those perused by the NPM pioneer, the UK. A focus will be on institutional and ideological particularities of the German NPM response, and detailed information about the NPM contents implemented in the Federal Republic will only be mentioned if they support comparative claims. Hence, comprehensive description of the reforms’ building blocks as well as its detailed characteristics and functioning will not be part of this paper, as I will rather provide a broad assessment to what extent German reform feature can be ascribed directly to internation NPM influences.

In the following, relevant information about the UK, its governmental structure and reform efforts will be given. Moreover, the structure of the German government system, and local government reforms since the 1960s will be elucidated, followed by an evaluation of reasons as well as initiators behind reform efforts. Lastly, the reform effort in Germany will be broadly compared to those in the UK in order to classify the local administrative reforms in the Federal Republic.

2 The United Kingdom

2.1 Government Structure

The UK is a unitary state following the “public interest” and not the Rechtsstaat model, which has transformed from a decentralized to a highly centralized system of government, in which the powers of local government are limited. In this context, local authorities lost most of their powers after the Second World War, including responsibility for health, social security and public utilities, and have progressively declined in influence since. (Wollmann 2004: 644, Wollmann 2000:919). The number of districts were drastically reduced in the 1970s probably more so than in any other western country, yet social service delivery that was traditionally largely carried by municipal staff continued to be mainly performed by local government employees, and only changed under NPM reforms (Wollmann 2004:644).

In addition, central government exercises considerable controls over local action, an example of which is that local authorities are forbidden by law to do anything that is not expressly permitted by Parliament. At the same time, local authorities’ work is increasingly regimented by central government instructions, as councilors can for example be personally fined for breaching audit rules, and local government has very restricted discretion in its ability to raise money (Robert Gordon University).

2.2 NPM Reform Endeavors

The UK conservative government under Thatcher fully embraced the NPM reforms as the first country in Europe from 1979 onwards, and the intensity and pace of management reforms have earned the country the title as a model of NPM reforms (Wollmann 2004:644). Ideas of managerialism and management consultancy dominated the reform discourse, and a broad belief of NPM was “that the private sector was inherently more efficient than the public sector, that the civil service was too privileged and complacent, [and] that the state was too big and too interventionist” (Pollitt, Bouckaerd 2004:292f). Moreover, public choice theory and new institutional economics constituted the theoretical and ideological framework to move market mechanisms and competitive concepts into the public sector (30f). Thus, the buzzwords of these reforms efforts were efficiency, effectiveness, economy, with approaches such as privatization, outsourcing of services or performance measurements of public service employees, and the Thatcherite reform efforts were soon adopted in other countries, such as New Zealand, and Australia as well as by most western European countries (Clark et al 1997:20). In addition, slogans such as user choice, and client focus, flexibility, private sector innovation, market-based solutions, simple and frugal government, which should be steering not rowing, dominated this NPM paradigm that was to supersede the old public administration (Pollitt, Bouckaert 2004: 293ff). Furthermore, NPM states like the UK “envisaged an entrepreneurial, market-oriented society, with a light icing of government on the top” (100).

2.2.1 NPM Influences on Local Governments

The unusual dominance of a single party form of executive in the UK provides the national government with remarkable abilities to realize its own reform desires. As a result, local government is less protected against central government interventions than most other European states (Pollitt, Bouckaert 2004:294), which for example enable the national government to dismantle the traditional discretion local governments had over local spending in the 1980s NPM reforms (Wollmann 2004:644).

Despite the fact that the UK engaged in efforts to strengthen local governments in the early 1980s, after they had undergone major territorial reforms in 1972, municipalities remain functionally relatively weak even today, and the “conservative government aimed at curtailing the powers of the local authorities and at strengthening its top-down grip over them” (644). Through NPM reforms powers were withdrawn from local authorities, in a top-down manner, and central control over the lowest level of government was strengthened (644). As part of the reform 50 per cent of all public employees were transferred to the private sector from 1979 until 1994, and the traditional position of local government employees as the main provider of social services was abolished (Rhodes 1994:139f).

At the same time, the functional capacity of local elected councils was decreased through the transferal of local government tasks to special purpose agencies and organizations[1], which operate outside local political accountability and are “practically […] local agents of central government bypassing and all but marginalizing elected local government and its […] scope of responsibilities” (Skelcher et al 2003: 11f). Hence, the NPM changes to local government have converted Great Britain form a highly decentralized country into a vastly centralized one. Moreover legislation was passed to oblige local authorities, which had a quasi-monopoly in the delivery of public services, to expose service delivery to “market testing” through competition (Wollmann 2004:645).

The new Labour government, taking office in 1997, toned down the NPM drive, but introduced performance management measures. This meant that local authorities had to undergo regular inspections and assessment, which added to the centralist guidance over local governments (646). In sum, changes to local government structures did not come from internal municipal incentives but from top-down central government orders, which were in the since the late 1970s highly influenced by the NPM ideologies.

3 German Government System

The Federal Republic of Germany, following the Rechtsstaat model, has a complex institutional system of government with a convolution of different tasks, responsibilities and competitive political influences, and consists of 16 federal states (Länder). The country’s federal constitution identifies the Federation and the Länder as the two levels of government, and the Länder have independent, but limited government authority, and control the major part of pan-state administration, for example schooling, internal security as well as the organization of Local self-government (Hartmann 53f). In addition, each Land is divided into districts (Bezirke), and further broken up into counties (Kreise), which consist of municipalities and their local governments (Ridder 2005:445). Hence, Germany has three administrative levels of government, with the local governments on the lowest level, which since recent electoral reforms are governed by directly elected mayors and local councils (Fig. 1) (Reichard 2003:345). In sum, the Federal Republic is an unusually decentralized state, where the functions of the federal government are rather narrow in scope. In addition, a highly a law-based principle is specific to German administrative culture (Reichard 2003:349), and accordingly the local level is traditionally the part of government that is most susceptible to administrative change (Pollitt, Bouckaert 2004:97, 257).

illustration not visible in this excerpt

Fig. 1: Structure of the German system of Government (Ridder et al 2005:445)

On the one hand, according to the Basic Law, the cities, municipalities and districts have the right of self-administration, and due to this right local governments traditionally carry out an extensive range of local tasks such as local transport, public road-building, water, gas and electricity supplies, sewage disposal services, town planning and financing of social assistance or infrastructural provision (Wollmann 2000:919). At the same time, non-public not-for-profit organizations (NPO) traditionally carried out an extensive range of local tasks, such as the delivery and financing of social assistance or infrastructural provision, which differs from countries like the UK, in which social service delivery in municipalities was traditionally mainly carried out by local government employees (919, Wollmann 2004: 644). Following the subsidiarity principle, these NPO service providers have a quasi-monopolistic position by tradition (Reichard 2006:475).


[1] These special-purpose agencies and organizations are called quasi-non-governmental organizations, which are appointed by and which are largely financially dependent upon central government (Skelcher 2003:11f).

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Local Government Reforms in Germany
Public Administration and Governance
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Local, Government, Reforms, Germany, Public, Administration, Governance
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Janna Lüttmann (Author), 2007, Local Government Reforms in Germany, Munich, GRIN Verlag, https://www.grin.com/document/81226


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