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Policy analysis in Germany$

Sonja Blum and Klaus Schubert

Print publication date: 2013

Print ISBN-13: 9781447306252

Published to Policy Press Scholarship Online: January 2014

DOI: 10.1332/policypress/9781447306252.001.0001

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Statist policy advice: policy analysis in the German Länder

Statist policy advice: policy analysis in the German Länder

(p.105) Eight Statist policy advice: policy analysis in the German Länder
Policy analysis in Germany

Roland Sturm

Markus M. Müller

Policy Press

Abstract and Keywords

This chapter argues that while there is a fully developed government apparatus at the Länder level, as well as complete sets of actors and interests of civil society, there is still a major lack of governance autonomy. This is due both to a culture of co-ordination among Länder governments and the federal government as well as a strong tradition of administration-biased policy-making. A legal lens on issues and solutions dominates government discourses in most policy arenas. At the same time, Länder governments formally share responsibility in federal law-making via the Bundesrat, which reinforces the administrative practice of policy-coordination as multi-level policy-making. This serves as a clearing house for the overwhelming part of policy issues, sorting out the few political ones which make it on the federal-Länder agenda of high politics. The chapter argues that it seems almost impossible to make general statements about policy analyses in the Länder where European law and programmes are involved. Länder governments’ standpoint towards ‘European’ issues strongly depends on the policy fields affected. Where European funds are involved, evidence-based governance and a more economic and formal approach to policy analysis and policy-making is to be found – an innovation in view of Germany's legalistic tradition.

Keywords:   Europe, multi-level policy-making, law, European funds, governance, Länder, Bundesrat, civil society

Policy analysis in the German Länder1 is above all the business of Länder ministries, Länder audit offices and parliamentary research units. Ministries may hire the advice of private consultancies. They may also listen to lobbyists – some of whom have their own think tanks – and to the representatives of institutions legitimised by social corporatism, such as Chambers of Commerce. By policy analysis, we refer to policy input at large, although we place special emphasis on formal and informal policy advice as provided by a number of institutions.

Agenda-setting and policy analysis under institutional restrictions

All German Länder have the necessary institutional prerequisites for identifying political challenges, the financial means to work with experts and the ability to organise epistemic communities. Their governments are responsive to regional problems. They plan and organise political processes and evaluate alternative strategies. More than in decentralised forms of federalism, however, the German Länder are restricted in their control of the political agenda in Germany's unitary federalism. Policy analysis on the Länder level is therefore focused on a rather narrow range of topics. Furthermore, it tends to suffer from a limited choice of alternatives, especially when institutional obstacles, as is the case with European Union (EU) subsidy control, for example, or the imperatives of Germany's cooperative federalism, force Länder governments to comply with rules outside their jurisdiction (Sturm, 2006).

Controlled agenda-setting in German federalism takes several forms. A noninstitutionalised instrument of nationalised agenda-setting in the Länder is party politics (Schmidt, 1980). Länder parties have recently won greater freedom to develop their own political initiatives and to put Länder interests before the interests of their national party organisations (Detterbeck and Renzsch, 2008, p 52). In addition to informal restrictions to political choice on the Länder level, there are two important formal restrictions: federal and EU competences. In Germany`s brand of cooperative federalism, which is anchored in a complex universe of interlocking policy-making involving the federal and the Länder levels, the Länder have lost most of their autonomy, even with regard to taxing and spending. They have no power to legislate in matters of taxation as this is a federal responsibility, and can only veto new legislation in the Bundesrat (the legislative body representing the 16 federal states). And because of the 2009 federalism reform, which put a ceiling on annual budget deficits, they now have to live with reduced spending powers (Sturm, 2010, pp 103ff). Costly Länder policies, for example, concerning higher education or infrastructure projects, certainly have a Länder policy input. However, the role of the federal government in financing these projects has important consequences for the feasibility of Länder policy initiatives. (p.106) The core Länder competences – public administration, the police, the media, culture and education – still allow the Länder to differ somewhat in their preferred area of policy analysis.

Policy-making at the EU level is usually, to some extent, detached from Länder policy routines, but is nonetheless a factor restricting political choice and therefore needs to be taken into account for policy analysis. The Länder depend, to differing degrees, on funding from EU Structural Funds or the Common Agricultural Policy. Implementation and policy analysis is here in the hands of a network of Länder and federal civil servants (Sturm and Schorlemmer, 2008, p 72). The Länder also try to access other EU programmes, and are affected by European legislation, implying that they have to accept numerous EU regulations. Länder civil servants introduce the Länder preferences into the deliberations of the complex network of national experts that monitor the actions of the European Commission.

In a limited way the Länder can search for opportunities for agenda-setting, and have three alternatives. First, they may play by the rules set by federal government and the EU and may try to find a political niche (Hildebrandt and Wolf, 2008b). Second, they can decide to go it alone (or find a Länder strategy). Institutional consequences of Länder strategies are cross-border and inter-regional efforts to engage with other regions /Länder in low politics, such as tourism, waste management or water resources management (Raich, 1995). Third, the Länder may try to develop new policy fields that have so far escaped the attention of the EU or the federal government. In some respects this has been true for labour market policies (Schmid, 2010) and industrial policies (Sturm, 1991), environmental policies until the 1970s (Eppler, 2008, p 323) and rural development policies (Grajewski and Mehl, 2008).

Decision-making processes

Two observations describe and explain policy analysis and decision-making by Länder governments: diffusion of public policies across Länder boundaries, effectively creating similar policy approaches and convergence, and difference between Länder, both in terms of heterogeneous preconditions for Länder policies as well as with regard to divergent approaches by their governments. The diffusion literature is broad and much of it is informed by the experience of US fragmented federalism, with few, almost exclusively informal, mechanisms of policy-making coordination (see, for example, Berry and Berry, 2007). There is significant policy diffusion among German Länder, most of which is rather uniform, incremental and highly formalised. Ideals of economic policies, standards of education policy performance or the constitutional implementation of a Schuldenbremse (balanced budget requirement) have been taken up by all Länder governments, in essence pushed by policy analysis in joint working groups and Fachministerkonferenzen (‘ministers’ conferences) as well as Bundesrat procedures. These highly formalised and standardised settings for policy coordination among Länder governments and between them and the federal government can only be understood when one takes into account the organisational structure of Länder governments, with their fully developed political and administrative apparatus. The actual political and administrative practice of this routine-based system of policy coordination gives policy diffusion in Germany quite a unique character and causes convergence in many policy fields on an almost automatic basis. It is so deeply embedded in policy-making and many decision-making procedures that (p.107) we should speak of an established culture. This is even the case where one would expect competition between Länder governments due to conflicting interests, such as Standortpolitik, with which Länder attempt to attract investments and new business developments (Müller and Sturm, 2010, pp 195-215). The strong link of politics and administration regarding policy analysis is a general feature of Länder policy-making.

As well as the impact of decisions of former governments, the power of socioeconomic factors or the relative importance of formal and informal diffusion paths, we would expect that party political conflict may be a major source of differences in policy-making (Hildebrandt and Wolf, 2008a, pp 15-16). If political parties have held office for a long time, it should be the rule that their beliefs, norms and policy differences become visible in what is decided when finite resources are to be distributed across policy fields, and priorities regarding political goods need to be set. In fact, as many contributors to Hildebrandt and Wolf (2008b) attempt to show, there are policy variations between Länder in accordance with the preferences of the party in government. Some of it seems rather symbolic or peripheral, such as variations in Studiengebühren (university fees), accounting for less than 1 per cent of total university education spending where they exist, or affirmative action and gender mainstreaming (Gleichstellungspolitik), to mention only two. Other issues, such as the organisation of public administration (how middle and lower bureaucracies are organised), electoral systems (the specific mixture and mechanism of proportional and majoritarian elements), or school systems (two or three types of secondary schools), are more substantial. However, they do not necessarily vary in accordance with party political preferences. Cross-Länder differences of decision-making within a given policy area, we would rather hypothesise, are generally less significant than cross-area differences, say, between education policy and environmental or economic policies.

The constitutional situation of the Länder, with its specific procedures for lawmaking, policy implementing and review, does not tell us much about the practice of policy analysis and its impact. Formally, the Länder constitutional systems mirror their claim to and their identity as ‘states’ (Eigenstaatlichkeit). Each one of them has a full governmental structure (with a head of government, called ‘Minister-President’ in most Länder, as well as ministries of different size and significance), parliaments of significant size, courts of auditors and constitutional courts. While there is some variation in how ministries are named and what policy fields are deemed significant enough to deserve a ministry, institutional differences between the Länder are limited. How civil servants are hired, the salaries they earn, the career paths they can pursue and so on is organised quite uniformly. Since the 2005 reform of German federalism the Länder governments can make their own public employment laws, and differences in this respect are still marginal.

Decision-making in Länder governments is driven by the logic of coalition government and the art of creating and sustaining a political bureaucratic apparatus, in which the capacities of the bureaucratic organs, namely, the ministries and their subordinate administration, need to connect with the intentions, norms and contingencies of the political world. Democratic government based on party politics in a representative system is always characterised by fluid centres of power. Who is important and influential is not necessarily determined by formal office-holding. It also depends on the image presented by the media, the setting of societal actors in the field, party political developments, the contingency of human sympathies and antipathies as well as something we used to call ‘fortuna’.

(p.108) As in most parliamentary systems, policies in the Länder are usually initiated by the government. Only for symbolic reasons or if purely parliamentary issues are involved (for example, remuneration of members of parliament), a bill will start its way in the Länder parliaments. First and foremost, any new government starts with a coalition treaty based on the analysis of former policies and party political preferences. Coalition treaties represent a melange of mechanisms for the resolution of conflicts between coalition partners, an agenda of political projects to be tackled in the current Legislaturperiode (legislative period) as well as a set of norms, values and symbolic selfrepresentations (for example, environmentally oriented), which themselves serve both to communicate with the party rank and file of the coalition partners and to provide a general normative framework within which the partners fight for their ideas and issues. After all, and even more so today than some decades ago, coalitions are formed for a limited period of time. The parties in government compete, so there is constant tension between conflict and consensus strategies by the relevant actors (Müller, 2011). It has been claimed that Koalitionsausschüsse (coalition committees) are the most important locations of political decision-making, including policy analysis and conflict resolution. They are usually made up of the head of government as well as his or her equivalents on the side of the other coalition partners, the Fraktionsvorsitzende (parliamentary party leaders) of the coalition parties, as well as other major representatives of the coalition parties. Depending on the coalition ‘culture’, hardly anything of importance is decided by the government, ministries or parliament without prior approval of the coalition committee. However, its actual power depends a lot on the actors involved, particularly the participants themselves, as well as the set of issues and problems to be addressed. In contrast to cabinet, for example, there is no formal need to involve the coalition committee. Thus, when it is dysfunctional, for instance, when it produces decisions that do not allow ministries to act or prevents the chancelleries and so on doing their job of governing, it is no longer be addressed. If this happens, it is usually a sign of political sclerosis and government crisis.

There are (at least) three major actors in Länder governments that provide and claim the ability of policy analysis and a corresponding steering capacity in dayto-day policy-making. First and foremost is the Staatskanzlei (state chancellery), the formal seat of the Minister-President. This institution coordinates and supervises the general government line of policy-making and resembles, in many ways, the Chancellor's Office at the federal level. The power of state chancelleries stems from their close interconnectedness with the head of government, including their position in interfederal arenas, as well as their role in preparing cabinet and coalition committee decisions. The second of the major actors are the ministries, which represent the offices of the individual cabinet members. They have both the ministerial expertise of the subject matter as well as the administrative apparatus to realise the government's decisions. ‘Details matter’, and it is the bureaucratic expertise without which any coordinating unit, like a state chancellery, is more or less void.

Chancelleries and ministries have different ways of recruiting staff. Apart from political appointments, including positions of high confidence, ministries recruit in accordance with the rules of their resort, that is, the career tracks of justice, of finance and the like. State chancelleries frequently recruit staff from ministries. Sometimes positions in the former are not filled on a permanent basis, so chancelleries have greater flexibility. Borrowing staff from ministries for limited terms means that the old ministerial ties remain strong. For seconded civil servants new loyalties to the (p.109) chancellor are risky. There is no special career pattern for policy analysts, nor are analysts specifically searched for. Strategy units, where they exist, are usually either filled with staff that are already on board, or with confidants of significant political loyalty. Consequently, no general statement on analysis techniques and methods, on dominant schools and doctrines, can be made. The judicial environment has, however, a dominant impact. New debates on better governance through higher participation and more transparency may in the long run change the framing of problems and the cultural predispositions of ministries and chancelleries vis-à-vis policy analysis and policy-planning.

In effect, the state chancellery and the ministries need to act in harmony to secure a smoothly working government which is able to confront the third major actor in policy-making forcefully: organised society, including lobbyists and civil society. There are permanent contacts between government and organised society in each Länder on matters of policy analysis. Most federal organisations, such as business and labour organisations, non-profit, for-profit and lobbying groups and so on, are also active at the Länder level. A considerable share of government activity is directed towards these organisations. They are affected by both government regulations as well as direct or indirect recipients of government spending. Thus, they have a significant interest in becoming or staying involved in governmental policy analysis and policy-making, as both their legitimacy and their political power, sometimes even their pure existence, depend on public policies.

Without the incentives for policy analysis and the results of policy analysis provided by societal organisations, Länder governments would find policy implementation to be a much harder job because of the threat of permanent conflict (Hanf, 1978). In the context of policy-making in the Länder it is not easy to separate ‘organised society’ from Länder bureaucracies and political actors. We witness a policy-oriented network structure that throws government decision-making into a complex process, where policy-makers are veto players, negotiators and often subordinates, quite often at the same time. Three examples may illustrate this. First is health policy, and hospitals in particular. The Länder are in charge of financing the maintenance of hospitals to ensure sufficient and general access to their services in all regions. However, Länder are the Krankenhausträger (hospital authority) for only a few hospitals, namely, university hospitals, which have a major research focus. The rest of the hospitals are, in essence, either sponsored by local governments (Stadt- oder Kreiskliniken) or by non-profit organisations, such as churches or public charities. Both of the latter cannot be seen as government bodies, although local governments are legally defined as (independent) Gebietskörperschaften (public territorial bodies) of the Länder and are thus part of their ‘statehood’. They are formally subject to Länder governments' Staatsaufsicht (legal supervision) that includes the constitutional competence to rearrange local communities in terms of size, organisation and fiscal remuneration provided no abolition of local government is intended and local government autonomy is ensured. However, when it comes to issues of public finance, local governments act as bargaining partners vis-à-vis the Länder governments. They pursue their (fiscal and political) self-interests.

Second is education policy, and the school system in particular. The Länder are responsible for maintaining a functioning school system in all regions to guarantee that children go to school and get a decent level of education. However, the schools themselves are, with very few exceptions, not owned by the Länder. Most schools are (p.110) sponsored by local governments, quite a few are sponsored by non-profit organisations, and some by for-profit ones. The Länder governments hire the teachers and pay for them (only for ‘public’ schools,2 that is, the local government schools). The Länder also subsidise the maintenance and development of school infrastructures, such as buildings and cafeterias. In the case of ‘private’ schools, particularly those under the authority of non-profit organisations, Länder governments ‘refund’ a significant proportion of their cost, because these schools reduce the burden of public schools. Länder governments not only finance education (which amounts to almost half of their annual budgets), but they also stipulate what is to be taught, to what extent and at which age in varying degrees for public and private schools. This kind of ‘content regulation’, however, results mostly from ‘inter-Länder cooperation’ in the Kultusministerkonferenz (conference of education ministers) and their joint efforts in policy analysis.

Third is economic policies, and subsidies for businesses in particular. Many of these programmes, some of which are co-funded by the federal government, are implemented by business organisations, such as the Industrie-und Handelskammern (chambers of industry and commerce), Handwerkskammern (chambers of trade) or Innungen (guilds) and Fachverbände (professional associations). While the chambers are, unlike local governments, (independent) öffentlich-rechtliche Körperschaften (public bodies), and thus formal parts of Länder statehood (and subject to state supervision), associations and guilds are not. Legal relations between members and these entities as well as among these organisations vary, mainly according to federal law. But in essence there is no government domination of either of them. Chambers, guilds and professional associations are hybrids: a product of legislation that would disappear completely if the law was to be cancelled and at the same time a Selbsthilfeeinrichtung der Wirtschaft (organisation of business interests) with (internal) decision-making mechanisms designed to guarantee autonomy.

From a governmental perspective, organised society is a major force in shaping discourses on government performance. Depending on their relative weight, these actors comment and evaluate governmental action in media discourses. These discourses – that is, press, radio and television coverage, the new social media – are seen as a ‘currency’ in politics. The views expressed here have direct consequences for policy analysis and policy evaluation. No matter how many people actually read, watch or listen to these reports and comments, decision-makers take them seriously, not necessarily in their own right, but they serve as resource for political competition within and between parties.

Policy instruments

There are only a few categories of instruments on which governments can rely. First is law-making (in a broad sense), including regulation and participation in the federal legislative process as far as the Länder are concerned. We have already argued that the scope of sub-national legislation in Germany is small, in terms of size and discretion. However, Bundesrat voting behaviour might not only be of high relevance to federal, but also to Länder, policy-making, for example, regarding taxes and revenues. A second category of instruments is the provision of resources to pay for state or societal services, including incentives for private or third sector actors to achieve certain social welfare gains. Budget constraints are the most important drawback of this sort of instrument. (p.111) Länder budgets are almost completely ‘bound’ by legal or political liabilities due to the present and future costs of public employment (education and the police in particular), infrastructure investments and programmes, often co-financed by federal or local governments. And third, perhaps most importantly, communication with the media, the public and political stakeholders of diverse kinds. This category of policy instrument is obviously a bit diffuse, and it is certainly not easily distinguishable from the two categories just discussed. However, much governmental work is simply ‘communication’ and this is not only the consequence of party political conflict and other forms of pure ‘politics’. Rather, giving meaning to what one does as a government by talking and presenting issues to audiences, no matter how substantiated by legal or other facts, follows, to some extent, its own rules and thus constitutes a policy instrument in its own right. One could add a fourth instrument, nationalisation and privatisation, which are, of course, restricted to a rather small, but important, section of the government spectrum. They gained momentum in the 1980s and 1990s, when several Länder governments sold their shares in enterprises of different sorts, energy suppliers in particular. And as recently as 2011, the government of the state of Baden-Württemberg bought back parts of its former energy monopolist.

One of the most powerful political resources governments have in general is their power to influence media discourses. Their aim is to communicate the priorities originating from the results of their policy analysis. Länder governments have a natural advantage in playing the media game. They set most issues of the political agenda simply by ‘governing’, that is, for example, making government decisions public, setting the stage for governmental activities, such as a visit to a devastated site after a flood, a cabinet meeting followed by a government press conference, and bringing good news to societal, communal or private recipients of subsidies, such as hospitals, farmers, chambers of commerce, or theatres. Länder governments are closer to societal actors than the federal government and are held directly responsible for the quality of important (public) services, in particular schools and public security.

The major addressee of Länder governments in their efforts to manage public opinion is the Landespressekonferenz, the conference of journalists at the Länder level interested in politics. A high reputation in the eyes of this group of journalists is essential for cabinet members. The ‘political capital’ produced by journalism, articles, reports, television and radio coverage is the currency that is crucial to make virtually every policy instrument work. Media research has illustrated, as Floß (2010, pp 179-80) reports, that media coverage has a negative impact on political support if political processes are portrayed as inefficient. Governments in general and Länder governments in particular need to demonstrate ‘governmentability’, also in the sense of administrative management. Strong communication skills help even where strong interests are involved, be it those of fellow members of parliament, or those of lobby groups and recipients of various kinds.

The role of Länder governments is characterised, as mentioned above, by a relative lack of legislative powers. Debate can rarely be ‘conducted’ by a Länder government ‘in the shadow of hierarchy’. However, beyond (formal) legitimacy, Länder governments are generally able to provide two resources: funding and meaning. While the first has become more and more of a problem in times of budgetary constraints, the latter is potentially infinite. Governments need to be credible, reputable and in certain arenas inspiring to make things really work and to produce joint policy efforts. Coordinated governance instruments were popular at the federal level in the late 1960s and 1970s. (p.112) Nowadays, forms and kinds of coordination play with a pluralistically opened neocorporatism without any macroeconomic intentions. At the Länder level, they seem to be designed to order complex negotiation and bargaining processes concerning important political challenges, while setting the scene for the media, and demonstrating both leadership and participatory skills.

Policies, particularly new policy instruments, are rarely ‘designed’ in the sense of innovatively invented and formulated by either societal actors or a formalised joint discussion process of government and society. New ideas in policy analysis are more frequently born out of fortunate incidents, entering the arena by chance. This can be an interesting idea put forward by a research institute or some experimental experience elsewhere, taken up by a civil servant attending an international conference, which then circulates among ministerial units in search of someone ready to write up a new policy design for the Länder government. Transfer by chance might thus be the most important source for innovation. Working groups of Länder and federal governments play a particularly important role in strengthening policy inventions by distributing them (or preventing them from coming to life). It seems difficult to make general statements about effects, as the culture of these interfederal and cross-Länder processes of policy coordination varies by policy field. Moreover, certain issues in policy fields, such as the secondary school system, come with a historical, institutional and ideological load. Depending on the legacy of such preconditions, Länder governments are more or less (un) willing to serve as policy laboratories for other Länder, to coordinate with other Länder governments or to let external advice and expertise provided for by third parties become effective.

Whether epistemic communities (Haas, 1992) should be considered an important factor of policy analysis at the Länder level is an open question. There is only scarce evidence. Apart from quite specific studies, such as the OECD's PISA (Organisation for Economic Co-operation and Development Programme for International Student Assessment) reports (Wolf, 2008), which evaluate school performance, (external) expertise is more or less instrumental. Most external expertise goes back to an interested party, be it in government and parliament or outside state institutions. And, of course, little expertise is really undisputed, at least with regard to its consequences for policy-making. Thus, expertise and expert testimonials are more a sub-category of ‘communication’ resources than an independent influence on policy analysis.

‘Coordinated governance’ is in general a major challenge for Länder governments. In health, education or economic policies, cultural or security issues, both regulation as well as spending are politically unthinkable without stakeholder involvement. As Donahue and Zeckhauser (2008, pp 500-3) argue, private involvement in governments' activities is hardly ‘new or rare’. They distinguish in particular between ‘direct government provision’ and ‘cheque writing activities’. In their research they find empirical evidence for the US that direct government provision, that is, services provided by public employees, has been in decline since the Reaganomics of the 1980s. To our knowledge, there is no application of their methodology to the German Länder. However, we assume that while there was a peak in the growth of public employment in the 1960s and 1970s, this, and efforts to reduce public employment today, are not driven by ideology. No Thatcherite ideas inform debates about cutting back on direct state activities. The most common form of public employment is Beamte (tenured civil servants). As these employees do not pay social security contributions and enjoy privileges vis-à-vis health insurance, ‘tenure’ causes a significant burden (p.113) on future Länder budgets. This marks a difference to the federal government insofar as outlays for public employment are of much greater relative importance for Länder budgets than for the federal budget.

German legalism is a central topos that helps to understand policy analysis, policymaking and the instruments used for policy implementation. Civil servants with legal training as well as legal thought, as such, still dominate administrative practice, both quantitatively and qualitatively. Policy analysis that ignores the significance of legalism will also fall short of recognising the effects of cooperative federalism for the path dependency of policy development. Legalism contributes to a strong cultural orientation, which implies equal living conditions in the Länder. The equality paradigm stresses both uniform legal development and also a redistribution of resources to guarantee a comparable level of infrastructure development in the whole of Germany. Even when Länder governments could pursue a different line of policy-making or could make use of a different set of policy instruments, the advocates of convergence find support in the German legalist-corporatist tradition. Many decision-makers, advisers and analysts, both in public administration and in parliament, have gone through legal training, and those who have not usually accept the predominance of the legal discourse including its standards. As soon as ‘street-level bureaucrats’ administer the law by deciding cases, chances are that these decisions become subject to judicial review. Interpretation of laws by the judiciary is considered to be of utmost importance and is respected by both administrative and political decision-makers. In a sense, the legal value of a policy is often more highly regarded than its political value. While this is certainly not to argue that there is no political discretion left, and that interests and ideas cannot break through a wall of legalism, legalism represents a major force in day-to-day policy analysis and policy-making. This certainly accounts for the high quality of German administration in general in terms of Rechtsstaatlichkeit (obedience to the law), thus making public administration predictable and trustworthy. However, it also implies an extraordinary emphasis on the relative uniformity of legal acts and their consequences.

Policy innovation

Policy reform on the level of the Länder as a result of policy analysis can come in four categories: (a) efficiency reforms, (b) reforms resulting from Länder competition, (c) policy advice, and (d) reforms resulting from popular demands.

Efficiency reforms

A typical efficiency reform is the call for a reduction of red tape and of staff in ministries and – in general – of public administration. As the Länder are responsible for the lion's share of public administration in Germany, their policies are crucial for creating efficiency gains. We can witness in all Länder elements of new public management (NPM) strategies although nowhere a complete acceptance of those. The responsibility of ministries for resources management has been strengthened, targeting is used to keep policies focused and cost-efficiency comparisons are more widely used. Policy analysis in this context is to a greater extent now influenced by rational choice methods and economic indicators (Schorlemmer, 2006, pp 92ff). In (p.114) addition, the number of staff of the Länder has been reduced, but the intended savings have not been forthcoming; on the contrary, staff costs have increased.

There is a great deal of consensus on the new kind of policy-making that is implied by efficiency reforms. An empirical study has shown that all the Länder expect cost reductions for their economies, transparency of political decisions, savings and improved legitimacy of policies (Sturm and Müller, 2005, p 29). Less clear is who should take responsibility for efficiency reforms. It can be shown that only if political capital is invested in these reforms, this means that there is some kind of prime ministerial responsibility for reform measures, policy analysis will change and the power of vested interests will be reduced.

Reforms resulting from Länder competition

There is a surprisingly low level of policy learning with regard to the instruments of efficiency reforms at the Länder level, and also when it comes to subsidy controls (the Länder do not even agree on the definition of a subsidy). In some other policy fields it is possible to identify avant-garde groups of Länder who took the lead in new policies and thereby provoked others to follow and to copy successful policies. For industrial policy-making, especially for the decision to promote ‘technology parks’ (regional centres for technological innovation), it can be shown that the innovation narrative was developed by the government of Baden-Württemberg in the 1980s. Baden-Württemberg and Bavaria, together with Berlin and North Rhine-Westphalia, were the first Länder to create a new policy focused on bringing together science, start-ups and public funding on a small scale in order to inject a dose of new economic activities into regional economies. All the other Länder followed their example, with mixed results, however, because there were soon too many ‘technology parks’ around searching for demand, and the avant-garde group of Länder had lost its competitive advantage (Dose and Drexler, 1988; Jürgens and Krumbein, 1991).

A similar dynamic has been analysed with regard to Länder policy-making in the field of labour market policies (Schmid and Blancke, 2001). The existence of an avantgarde group of Länder was explained in this context less by paradigmatic changes in the perception of policies. These can certainly be observed with regard to industrial policies where the economic success of Japan in the 1980s challenged state–industry relations in Germany. With regard to policy change in Länder labour market policies, the decisive factor was the size of the unemployment problem. Labour market policies as well as social policies (Rothgang and Wessels, 2008) of the Länder were, above all, problem-driven. Nine German Länder were in the avant-garde group which engaged in active labour market policies and was searching for new instruments to improve regional employment, also in the long run. Here the economically more successful Länder with lower unemployment rates were hesitant to follow the lead of the avantgarde group. They drew different lessons for policy-making and relied with greater confidence on markets.

There was also a divide between the innovation policies of the Länder in the field of education policies. The challenge of the international studies on school performances did not lead to a uniform response, although it had some effects on the convergence of policy instruments and was strongly supported by the institutionalised cooperation of the Länder. To a lesser extent than used to be the case, the strategies of education policies followed party political lines. Still there is policy learning. It has (p.115) been observed that this starts from bilateral exchange between the Länder and then spreads in concentric circles (Münch, 2010, p 189).

In a number of policy fields, such as higher education and police reform, the legal norms dominating activities meant that policy innovation produced convergence out of the plurality of Länder regulations (for higher education until 2006: federal framework legislation, and for the police, for example, the penal code). It has been shown, however, that in the field of environmental protection, where federal regulations are seen as having weaker sanctions, a number of Länder at least temporarily tried to resist convergence and contributed to considerable delays in policy innovation (Volkery, 2008, pp 270ff) (see Table 8.1).

Table 8.1: Policy innovation by efficiency reforms in the Länder



Convergence by federal coordination

External incentives

Industrial policy Education policies

Labour market policies Social policies


Universities (until 2006)

Environmental protection

Education policies

Policy advice

Policy analysis and policy advice by think tanks, such as the Bertelsmann Foundation, foundations of political parties or other independent organisations are certainly noticed by policy-makers, although we know little about their impact. If think tanks want to be heard they need acceptance in most of the Länder. An important filter is party politics. Reports on policy alternatives are often written by academics. Their role, however, is not to contribute to policy analysis, but to legitimise a party political decision. Academics can shape the debate on important political issues if there is not yet a party political controversy on the subject (for instance, climate change). A more neutral institution is the Audit Office, although its conclusions cannot escape party competition either. Opposition parties in particular sometimes see the Audit Office as an ally (see Table 8.2).

Table 8.2: Policy analysis by third parties



Strategic use

Epistemic community (universities, experts)

High, when there is no party political controversy, otherwise low to medium

From strategic to defensive (where advice ignores political confrontation)

Audit Office

High, if there is party political interest in scandalising the findings; medium, when only public servants feel the pressure

Rare; exception: special reports of audit offices

Reforms resulting from popular demands

Popular demands for policy reform had one common denominator: more direct democracy. These demands led to political reform at the Länder and the local level. At (p.116) the local level directly elected mayors became the rule and the number of referenda on local affairs increased. On the Länder level hurdles for referenda were lowered. Most of the referenda initiatives focused on the reform of education policies and the reform of democratic institutions. Initiatives concerning social and economic policies were also of some importance (Sturm, 2010, pp 142ff).


Policy analysis in the German Länder suffers from institutional and procedural restrictions and the lack of budgetary firepower. The importance of epistemic communities, think tanks or other independent advice for policy analysis is limited. Expertise tends to become an additional weapon in the all-pervasive party political game. Policy analysis is, above all, the task of ministries, and is strongly influenced by lobbyism and hybrid state–society organisations. All the Länder use a comparable spectrum of policy instruments, and we have identified two reasons why this is the case – the procedural bias of the Rechtsstaat, that is, the predominance of legal thought which concentrates on form and not on results, and the party political need to sell politics, especially to the media. The Länder operate in a fully functioning party political environment, which politicises policy analysis even if this means that policy-making has inadequate substance. For the Länder, policy learning and policy diffusion – be it from the federal level or among the Länder – is a source of shared policy analysis.



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(1) The Länder are the 16 states that embody a sub-national level of politically autonomous units in Germany. The Länder claim ‘statehood’, that is, their governments and parliaments and so on are legally independent from the federal administration. The major task of the Länder is the implementation of both federal and Länder laws. The Länder executives sit in the Bundesrat, the Second Chamber for federal law-making.

(2) Many teachers at private schools are civil servants seconded to private schools.