Decentralizing for performance? A quantitative assessment of functional reforms in the German Länder
| Author | Philipp Richter,Falk Ebinger |
| Date | 01 June 2016 |
| DOI | 10.1177/0020852315586916 |
| Published date | 01 June 2016 |
| Subject Matter | Special Issue Articles |
Review of
Administrative
Article
Sciences
International Review of
Administrative Sciences
2016, Vol. 82(2) 291–314
Decentralizing for performance?
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DOI: 10.1177/0020852315586916
functional reforms in the
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German La¨nder
Falk Ebinger
WU - Vienna University of Economics and Business, Austria
Philipp Richter
University of Potsdam, Germany
Abstract
In the last 10 years, the governments of most of the German La¨nder initiated adminis-
trative reforms. All of these ventures included the municipalization of substantial sets of
tasks. As elsewhere, governments argue that service delivery by communes is more
cost-efficient, effective and responsive. Empirical evidence to back these claims is incon-
sistent at best: a considerable number of case studies cast doubt on unconditionally
positive appraisals. Decentralization effects seem to vary depending on the performance
dimension and task considered. However, questions of generalizability arise as these
findings have not yet been backed by more ‘objective’ archival data. We provide empir-
ical evidence on decentralization effects for two different policy fields based on two
studies. Thereby, the article presents alternative avenues for research on decentraliza-
tion effects and matches the theoretical expectations on decentralization effects with
more robust results. The analysis confirms that overly positive assertions concerning
decentralization effects are only partially warranted. As previous case studies suggested,
effects have to be looked at in a much more differentiated way, including starting con-
ditions and distinguishing between the various relevant performance dimensions and
policy fields.
Points for practitioners
In multi-level systems, reformers of public administration have to decide which level is
most appropriate for the implementation of a certain task. In the last years, reformers
have often decided to decentralize state functions in the hope of creating an effective
and efficient government. Yet, in reality, the claim to deliver public tasks better and, at
Corresponding author:
Dr Philipp Richter, University of Potsdam, Political Science, Administration and Organization, August-Bebel-
Str. 89, Haus 7, Raum 219, Potsdam 14482, Germany.
Email: philipp.richter@uni-potsdam.de
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International Review of Administrative Sciences 82(2)
the same time, cheaper in decentralized units proves unfeasible. We provide empirical
evidence on the performance effects of decentralization and show that it has other
advantages and other disadvantages compared to state service delivery. Reformers of
public administration have to ponder these pros and cons in each particular case.
Keywords
decentralization, de-concentration, federalism, local government, performance meas-
urement, public service delivery, social and environmental administration
Introduction
In the past 10 years, most German La¨nder governments initiated administrative
reforms, including changes in the function, structure and territory of their admin-
istrations. As elsewhere, the devolution of considerable sets of tasks from the state
to the local level was the most popular reform measure. Virtually all governments
of the 13 territorial states1 have, will or at least have repeatedly tried to decentralize
administrative tasks on a large scale to the local level (cf. Bogumil and Ebinger,
2008). These reforms lead to the strengthened functional profiles of local govern-
ments. At a first glance, this is a win–win situation for both La¨nder and local
governments: the La¨nder can streamline their administrative structure, chastise
the allegedly sprawling bureaucracy and save money at the same time; and local
governments (and, here, particularly the counties and cities with county status) can
accumulate new tasks and resources in order to gain organizational leeway and to
boost administrative and political power within their jurisdiction and beyond. Both
partners claim that service delivery by local governments would not only be
cheaper, but also more efficient, effective and responsive towards citizens’ needs.
However, theoretical arguments and empirical evidence on decentralization effects
is extremely conflicting (see Kuhlmann and Wayenberg, 2016).
The differing concepts, political strategies, paces and, last but not least, successes
in the realization of these reform ventures in Germany have been repeatedly subject
to scientific scrutiny (Ebinger, 2010, 2013). Moreover, related performance
effects have been analysed in several concise qualitative comparisons featuring
differentiated performance definitions (cf. Bauer et al., 2007; Ebinger, 2009;
Ebinger et al., 2011; Kuhlmann et al., 2011; for further sources, see Kuhlmann
and Wayenberg, this issue). These case studies suggest that a universally positive
appraisal of decentralization reforms may not be warranted (cf. Kuhlmann et al.,
2011: 279ff.). However, only case studies have been conducted so far. Elaborated
quantitative logs of reform effects are absent.
Hence, the subject of this article is the performance effects of decentralization
reforms. In particular, we set out with a threefold goal: first, alternative methods to
capture organizational performance will be introduced; second, additional empir-
ical evidence as to whether functional reforms are appropriate measures to alter the
performance of public administrations is presented for the German case; and, third,
Ebinger and Richter
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by looking into two strongly differing policy fields – social services and industry
inspectorates – claims about the potential policy- and task-dependency of decen-
tralization effects will be substantiated.
To assess institutional impacts, two complementary, data-driven methodological
approaches were chosen. First, archival evidence for decentralization effects was
gathered for a selected group of tasks within the social services: the diagnosis of
disabled persons (cf. Richter and Kuhlmann, 2010; Richter, 2012). In the second
analysis, a cross-section comparison drawing on survey data from front-line indus-
try and labour inspectors is applied in order to compare performance in adminis-
trative set-ups characterized by varying degrees of decentralization.
Theoretical considerations and empirical observations
Local governments can be the subject of different types of reforms. Dollery et al.
(2008) distinguish between structural, functional, financial, jurisdictional and
organizational/managerial reforms. This article concentrates on functional
reforms, defined as ‘any changes in the number of types of functions performed
by municipal government through various means including the realignment of
functions between municipal governments and other orders of government’
(Dollery et al., 2008: 7). A transfer of tasks from the state to the local level can
be considered the most far-reaching functional reform and is frequently associated
with significant performance changes. The performance of public organizations is a
complex and multidimensional concept (Boyne et al., 2006: 6; see also Kuhlmann
and Wayenberg, 2016). One common classification of public organizational
performance is the ‘economy–efficiency–effectiveness’ (‘3Es’) model: ‘economy’
refers to the total input cost; ‘efficiency’ describes the ratio of inputs to outputs;
and ‘effectiveness’ is defined as the achievement of the formal objectives of services
(Midwinter, 1994: 37). The ‘3Es’ model was criticized, especially in the context of
local government performance evaluation, because of its limitations concerning the
measurement of responsiveness and democratic outcomes (Boyne, 2002: 18ff.).
For that reason, various extensions and concretions of the ‘3Es’ model were under-
taken. One of the most comprehensive collections was furnished by Boyne (2002),
who introduced five main performance dimensions, including 15 sub-domains
(Boyne, 2002: 19). While the multidimensional character of local performance is
undisputable, Boyne (2002: 19) nailed down the problem: ‘Whether data are avail-
able to apply these evaluative criteria in practice is another matter.’ For the same
reason, we limit ourselves here to impact assessment along the ‘3Es’ model and
neglect throughput and input legitimacy.
Theoretical basis
The performance effects commonly associated with decentralizations have been
widely discussed (cf. Kuhlmann et al., 2011; Schakel, 2010). Scaling down the
territorial dimension of task implementation has two effects (Houlberg, 2010).
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International Review of Administrative Sciences 82(2)
First, each local jurisdiction administers fewer cases with fewer employees; hence,
employee specialization might be reduced and economies of scale may be lost
(Swianiewicz, 2010). To the contrary, larger jurisdictions are considered more
effective and efficient (Andrews and Boyne, 2009). Second, larger jurisdictions
are associated with higher uniformity of the application of law as fewer and poten-
tially more professional authorities share the duty. On the other hand, small jur-
isdictions might increase the proximity to the addressees of a policy. Especially in
situations where local-specific circumstances are important for decision-making,
positive effects on the quality of task implementation can be expected (Faguet,
2014; Newton, 1982). However, this increase in responsiveness comes at a price:
contrary to non-elected state officials, the elected head of...
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