Municipal Implementation of Federal State Consolidation Programmes in Germany: Evaluation and Explanation of Different Outputs and Processes

The paper evaluates and explains different outputs and processes of local implementation of consolidation programs initiated by several German Länder for their municipalities. Councils usually decide on the participation in these programs and on specific consolidation means they implement in return for additional state grants. The programs are designed as a “help for self help”. Indebted local governments should be activated whose leadership gave up consolidating the budget because of missing prospects of success combined with electoral risks. If the programs are another case of up-scaling fiscal policies and strengthened fiscal rules characterizing policy responses to the financial and economic crisis or an outstanding attempt to revitalize local leadership and democracy is far from clear. As similar programs could diffuse into other multi-level systems answers are relevant for the scientific community as well as for policymakers. Because comparisons at the macro-level can only give preliminary answers I will present case studies of three independent cities which implement different consolidation programs. The case studies should answer the questions i) if local governments decide on appropriate consolidation means (Output-Legitimacy) that ii) gain acceptance of the council and the public (Input-Legitimacy) iii) through transparent and fair decision-making (Throughput-Legitimacy). Moreover, this paper discusses iv) if the specific program design of the state programs, socio-economic conditions, the horizontal and vertical distribution of power in the German local government systems or actor related factors – like leadership styles – effect the paths and results of implementation. The framework of evaluation is inspired by scientific discourses on the economic performance and impacts on democratic steering capabilities of fiscal rules and austerity policies. Moreover, approaches of actor-related institutionalism are used in combination with existing knowledge on local government systems and local political leadership to explain how actors choose options out of a “feasible set” of policy alternatives.