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Conceptualizing and Theorizing Jurisdictional Change

Draft, 10/ 08 / 2011

Stefan Goetze, Berthold Rittberger, Rebecca Rothkehl University of Mannheim

SFB 884 – The Political Economy of Reforms Abstract: In this paper we develop a conceptual and theoretical framework for the study of jurisdictional change. This analytical framework, in which we conceptualize jurisdictional reforms as instances of institutional change, enables us to derive systematic expectations about the conditions under which different types of jurisdictional change are being brought about (i.e. functional and territorial jurisdictional reforms or a combination of the two). To do so, we first identify the basic parameters of institutional change in the realm of jurisdictions: their distributional consequences, relevant stakeholders and the environmental conditions that affect jurisdictional choice. In a second step, we identify both material and ideational conditions that give rise to demands for jurisdictional change by affected stakeholders. Finally, we consider their preferences regarding the type of jurisdictional change and specify how framing processes mediate the outcome of bargaining for jurisdictional change. We substantiate our theoretical suggestions by explaining variations in recent jurisdictional reforms in Germany.

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1. Introduction The goal of this paper is to develop a theoretical framework for the analysis of jurisdictional change, understood as changes to the competencies and size of jurisdictions at a given level of government. To study jurisdictional change we integrate two largely separated bodies of literature. Currently, scholarship on jurisdictional change falls into two camps: scholars study jurisdictional change either by focusing on the re-distribution of competencies across levels of government or by focusing on changes to jurisdictional size. With a view to the former, theories of authority reallocation have addressed the allocation of authority across governmental tiers and ask why political competencies are reallocated “upwards” or “downwards” while the number and size of jurisdictions at a particular level is held constant (e.g. Gerring et al 2011, Hooghe and Marks 2003, Marks and Hooghe 2000, Kölliker 2001, Schakel 2010). A second body of literature – mostly to be found in the early public choice literature on (fiscal) federalism (e.g. Ostrom et al 1961, Ostrom 1972, Tullock 1969) and the “optimality” of jurisdictional size literature (Alesina and Spolaore 2003) – theorizes jurisdictional change as modification in the territorial structure of government: Here, the question here is not on the (upward or downward) shift of competencies to the “appropriate” jurisdictional level, but on increases or reductions of the scale and size of jurisdictions at a particular level (or the introduction of a new layer of government). The paper is structured as follows. We begin with conceptualizing jurisdictions as institutions that entail distributive consequences. Based on this conceptualization, we investigate the conditions under which a government is more likely to consider changes to the properties of jurisdictions at a lower level and elaborate on the likely preferences of stakeholders for the type of jurisdictional change to be adopted. In a third step, we derive propositions about the nature and the likely outcome of bargaining for jurisdictional change. Finally, we substantiate our theoretical suggestions by explaining variations in recent jurisdictional reforms in Germany.

2. Conceptualizing jurisdictional change In this section, we lay the conceptual foundation for investigating jurisdictional change. First, we introduce a typology of jurisdictional change. Second, we introduce our understanding of jurisdictions as institutions with distributional consequences. 2.1. Jurisdictional change: a typology To analyse jurisdictional change, we take recourse to a simple model of multi-level polity (see Figure 1).

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Figure 1: Jurisdictional Change in a Multi-Level Polity

In this model we consider two levels of government. Government at the higher level (L1) can decide about the properties of the lower level of government (L2). We consider two properties of L2 in particular: the number of jurisdictions at this level and the range of competencies (or functions) that are exercised by them.1 These two properties of L2, in turn, define the extent to which authority is concentrated in the polity. The more competencies government at L2 possesses and the higher the number of jurisdictions at the lower level, the higher the dispersion of authority in the polity. Reversely, the fewer the competencies that government at L2 possesses and the smaller the number of jurisdictions at this level, the more concentrated authority at this level of government is (cells II and III in Figure 1 represent polities in which authority is highly dispersed and concentrated respectively). Jurisdictional change refers to the successful attempt by government at L1 to change the properties of government at L2. Combining the territorial and functional properties of jurisdictions, jurisdictional change can, in principle, lead to different types of outcomes. The ensuing typology is displayed in Figure 2. 1 A jurisdiction is a territorially and functionally defined space within which political or administrative authority is exercised.

Ⅰ Ⅱ

Ⅲ Ⅳ

Higher level (L1)

Lower level (L2)

Government

Number of Jurisdictions

Co

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Properties of L2

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Figure 2: Types of Jurisdictional Change

Unless the status quo prevails (no jurisdictional change), we distinguish between eight possible types of jurisdictional change at L2. Turning to the functional dimension first, jurisdictions at L2 can either obtain less (centralization, type II) or more competencies (decentralization, type VII). Alternatively, the number of jurisdictions at L2 can either be decreased (defragmentation, type III) or increased (fragmentation, type VI).2 We label the former type of jurisdictional change functional reform and the latter type territorial reform. Functional and territorial reforms can be combined in various ways (see types I, IV, V, VIII). These types of jurisdictional change can be further distinguished with regard to the consequences for the concentration of authority in the polity. (We refer to this dimension of jurisdictional change as its direction.) Jurisdictional change through Centralisation cum Defragmentation (I), Centralisation (II) or Defragmentation (III) will lead to a greater concentration of authority in the polity. (Jurisdictions at L2 will have fewer competencies and / or their number will be reduced.) Jurisdictional change through Fragmentation (VI), Decentralisation (VII) or Fragmentation cum Decentralisation (VIII) leads to a greater dispersion of authority in the polity. (Jurisdictions at L2 will have more competencies and / or their number will be increased.) To develop a theoretical framework for jurisdictional change, we consider answers to two questions as imperative:

When (and why) will government at L1 initiate a change in properties at L2?

2 The relation between the fragmentation of a level of government and the (average) size of jurisdictions is a negative one: the larger the number of jurisdictions at a level of government (and hence its fragmentation), the larger the size of the (average) jurisdiction at this level.

Defragmentation

Territorial Reforms (Changes in the number of jurisdiction within level)

Status Quo Fragmentation

Functional Reforms (Transfer of competencies Across levels)

Centralization

Status Quo

Decentralization

Authority-concentrating reforms

Ⅰ Ⅱ Ⅳ

Ⅲ Ⅵ

Ⅴ Ⅶ Ⅷ

Authority-dispersing reforms

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Based on the typology presented above, how can we explain particular outcomes of jurisdictional change?

2.2. Jurisdictions as institutions From an analytical perspective, we conceive of jurisdictions as institutions, i.e. humanly devised constraints on action (North 1990). This conceptualization provides us with a simple but effective starting point for developing a theoretical framework for the analysis of jurisdictional change. Most importantly, by conceptualizing jurisdictions we assume that the properties of jurisdictions, as of any many other institutions, entail distributive consequences (Mahoney and Thelen 2010) since the competencies and size of jurisdictions affect the extent to which actors can realize their interests. (We will refer to actors whose interests are affected by jurisdictions as their stakeholders.) Distributional Consequences Based on our reading of both the theoretical and empirical literature on jurisdictional change, we hold that the properties of jurisdictions affect the distribution of material and ideational values and hence the interests pursued by governments and citizens. We claim that these interests can be grouped in three different domains (or ‘arenas’) of political life (see Figure 3). Figure 3: Arenas of Jurisdictional Effects

ADMINISTRATIVE Arena

Distributional consequences: Efficiency and costs of public goods

Stakeholders: L1: Government L2: Citizens

CULTURAL Arena

Distributional consequences: Expression of collective identities

Stakeholders: L1: Government L2: Citizens

POLITICAL Arena

Distributional consequences: Power and control

Stakeholders: L1: Government L2: Local Government

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The first domain affected by the properties of jurisdictions is the provision of public goods (what we will consider from hereon as the administrative arena). In particular, the properties of jurisdictions affect both the efficiency of public goods and the costs involved in producing them. Second, the properties of jurisdictions affect both the distribution of power between levels of government and the ability of government at L1 to control actors at the lower level of government (i.e. L2). We will consider the consequences of jurisdictions for the distribution of power and control as the political arena). Third, jurisdictions mediate the formation and expression of group identities (Maier 2007). We refer to the effect of jurisdictions on the ability to express collective identities as the cultural arena. In each of these arenas, government at L1 is confronted with a dominant stakeholder at L2.3 Both in the administrative and cultural arena, we consider citizens to be the relevant stakeholders at L2. In the political arena, we consider the primary actor at L2 to be the body of officials executing administrative functions. We refer to this type of actor as local government.4 Acknowledging the distributive consequences of jurisdictions as institutions suggests two implications for the analysis of both the initiation and outcome of jurisdictional change, which we will address in turn. Initiation of jurisdictional change: demand conditions With regard to the initiation of jurisdictional change, we hold that governments are more likely to consider changing the properties of jurisdictions when they cease to perceive them as effective to realise their interests. A change in (the perception of) a jurisdiction’s effectiveness will be the consequence of principally two types of factors: a change in the material environment of jurisdictions or a change in actors’ interests. These two factors represent the demand conditions for jurisdictional change. We will consider each of them in turn. Material demand conditions The distributional consequences of institutions result from an interaction between their properties and the environmental conditions (or parameters) within which they are embedded. Thus, the properties of jurisdictions (at time t) will reflect stakeholders’ preferences for a specific configuration of jurisdictions given certain parameters at some earlier point in time (t-1). A change in these parameters (while the institution’s properties remain constant) will thus likely lead to changes in the institution’s distributional consequences. When changes in institutional parameters adversely affect the interests of the dominant stakeholder, this actor is likely to consider changes in the properties of the institution in order to re-adjust the institution’s distributional consequences. We consider the changes in parameters that imply a deterioration of the

3 We consider stakeholders at the lower level as important for the decision-calculus by actors at the higher level because there are at least two channels through which actors at L2 can influence L1. On the one hand, the electoral connection binds the fate of the government at L1 to the consent of citizens at L2. On the other hand, governments at both levels are formed by political parties. As a consequence, intra-party stability (and thus the status of officials at L1) can be affected by the position of party-members holding government positions at L2. 4 It should be pointed out that the empirical referent of ‘local government’ will change with the level of government this model is applied to. When applying this framework to, for example, jurisdictional change at the sub-national level, ‘local government’ will correspond to the heads of municipalities, districts or regions (i.e. the actors that are usually identified as local government). When applied to jurisdictional change at the national level, however, ‘local government’ would be governments at the national level.

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stakeholder’s ability to accomplish her goals as the material demand conditions for jurisdictional change. Ideational Demand Conditions Government’s perception of the effectiveness of a given jurisdictional configuration cannot only change as a consequence of variations in environmental conditions but also when government itself changes its interests with regard to the distributional consequences of jurisdictions. With regard to the determinants of actors’ interests, scholarship on the role of ideas in processes of institutional change suggests that the interests of governmental actors cannot be understood without reference to their inter-subjective and ideological environment (Campbell 2002, Lieberman 2002).5 Appreciating that governmental actors are embedded in an ideational environment thus suggests that demand for jurisdictional change will also arise when there is a change in the content or salience of ideologies pertaining to the properties of jurisdictions. We consider such changes in ideologies as the ideational demand conditions for jurisdictional change. Bargaining and the outcome of jurisdictional change Conceptualizing jurisdictions as institutions with distributive consequences also has implications for analysing the outcome of jurisdictional change. Given that jurisdictions affect the extent to which their stakeholders are able to realize their interests, stakeholders will strive for a design that benefits them. When stakeholders pursue different interests, however, designing jurisdictions will be contentious. Given the potential for conflict, the process of jurisdictional change is adequately conceived as a bargaining situation. In line with the standard literature on institutional change, we assume that the outcome of bargaining for jurisdictional change will reflect the relative distribution of power between stakeholders and the constraints that structure the bargaining process. When studying jurisdictional change, we consider that government at L1 will primarily bargain with citizens. Even though citizens rarely do directly participate in decision-making regarding the design of jurisdictions, government nevertheless will take into account their preferences regarding the form of jurisdictional change. This is because government at L1, ultimately, is accountable to citizens at Election Day. The dependence of political survival of government on citizens’ approval also implies that, in choosing a specific type of jurisdictional change, government will also consider its relative political costs and benefits. Summary Figure 4 summarises our basic framework for studying jurisdictional change. We see jurisdictions as institutions that have distributional consequences. Given that their properties affect the extent to which stakeholders can realize their interests, the likelihood for jurisdictional change increases when stakeholders cease to perceive jurisdictions as effective in realising their goals. Chances in perceptions of jurisdictions’ effectiveness are the consequence of changes in the material environment of

5 Following North (1990), we define ideology as the subjective perceptions that individuals and groups of people hold to make sense of the world.

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jurisdictions (transmitted through changes in their distributional consequences) or in stakeholders ideational environment. Since multiple stakeholders tend to be affected by the consequences of jurisdictional change, its outcome is the reflection of a process of bargaining between stakeholders with different preferences and power resources.6 In the ensuing section, we will examine the demand conditions for jurisdictional change and develop some predictions about the outcome of jurisdictional change in the following sections. Figure 4: Jurisdictional Change from an Institutionalist Perspective

3. The initiation of jurisdictional change This section has two goals. First, we aim to identify the conditions under which government at L1 will demand jurisdictional change. Second, we will identify the preferences for the type of jurisdictional change by both government at L1 and the stakeholders of jurisdictions at L2. To deduce demand conditions and preferences, we adopt the following procedure. Based on our conception of jurisdictions as institutions, we consider change to be more likely when stakeholders perceive a given jurisdictional

6 Jurisdictional change, as other forms of institutional change, is a highly complex process. To explain jurisdictional change, we need to proceed from a simplified model of the reform process, focusing on a selected number of stages in the process of jurisdictional change. In this paper, we focus on two, analytically separated steps: the rise of demand for jurisdictional change and the supply of jurisdictional change, which we study here as the bargaining between stakeholders for the form of jurisdictional change.

Ideational Environment

Material Environment

Number of Jurisdictions

Co

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L2

Bargaining

Demand Conditions

Distributional Consequences

Stakeholders

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arrangements as inadequate for the realization of their interests. To identify specific circumstances under which government is more likely to initiate jurisdictional change, we will first identify the specific interests of government that are affected by jurisdictions and specify the changes in material and ideational parameters that are likely to lead stakeholders to perceive their properties as inadequate. Having identified such a demand condition, we also specify the associated preferences of government and stakeholders at L2 regarding the type of jurisdictional change. The identification of preferences is a two-step procedure. First, we consider the direction of jurisdictional change that is likely to be preferred. Given a specific demand condition, we consider whether stakeholders seek to concentrate or disperse authority in the polity. Having identified the preferred direction of jurisdictional change, we then consider the form of jurisdictional change that is likely to be preferred, i.e. functional or territorial reforms. To identify this preference, we consider the relative costs and benefits of functional and territorial reforms for stakeholders. Stakeholders thus choose between centralisation (Cnt), decentralisation (Dcnt), fragmentation (Fr), defragmentation (Dfr) and the status quo (SQ).7 This section is divided in four parts. In the first three sub-sections, we identify demand conditions and preferences of stakeholder for each arena of jurisdictional effects. In the fourth section, we consider determinants of stakeholders’ preferences. 3.1. Initiation of jurisdictional change in the administrative arena In the administrative arena, we hold that the properties of jurisdictions affect three specific interests of government at L1: the ability of government to effectively regulate social interaction (inter-jurisdictional efficiency), its ability to satisfy citizens’ interests (allocative efficiency) and the economic production of public goods (cost efficiency). Inter-jurisdictional efficiency First, government wants to effectively regulate social action interaction. The literature discusses this dimension of public good effectiveness under the label of inter-jurisdictional efficiency or the ability to internalise externalities. Inter-jurisdictional efficiency exists when the consequences associated with an activity (i.e. its externalities) are confined to the jurisdiction wherein this activity originates (Tullock 1969: 19). The precondition for the ‘internalization of externalities’ (Tullock 1969: 19) is that ‘the boundary conditions of a political jurisdiction include the relevant set of events to be controlled’ (Ostrom et al 1961: 835). From this interest in inter-jurisdictional efficiency, we can deduce a material and ideational demand condition for the initiation of jurisdictional change. On the one hand, government at L1 is likely to perceive the

7 When considering government's preference for the form of jurisdictional change, we assume that, in general, government will prefer one form of jurisdictional change over the other. However, this does not mean that governments do not pursue forms of jurisdictional change that combine functional and territorial reforms (i.e. type I, IV, V, VIII). Rather than treating these types of jurisdictional change as part of actor's regular choice set, we consider them as conditional preferences that actors adopt when they perceive the need to concentrate or disperse authority in a particularly comprehensive way. Such a perception is particularly likely when changes in parameters have been particularly drastic (i.e. in the wake of a shock) or when small, incremental changes have accumulated over time (i.e. when there has been a long temporal distance between previous reforms).

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properties of jurisdictions at L2 as inadequate when there is a growing mismatch between the scope of jurisdictions’ authority and the social action, in particular economic activities, which are supposed to be regulated by them. An extension of the spatial patterns of economic activities beyond existing jurisdictional border is particularly likely under conditions of expanding markets which itself is a consequence of technological change and economic growth (Werlen 2008: 23). On the other hand, a government’s evaluation of the adequacy of jurisdictional properties might change as a consequence of the greater salience of ideologies that highlight the need of government to establish inter-jurisdictional efficiency. A case in point is the doctrine of ‘planning’ that, for example, were particular important in 1960s and 1970s Western Europe (see Wollmann, 2004). In many Western European countries, planning programmes were seen as central to equalize variation in economic conditions within the national economy. To facilitate more equal economic development, many states engaged in jurisdictional reforms. When a government initiates jurisdictional change with the goal of improving inter-jurisdictional efficiency, we assume that the government will prefer reforms that concentrate authority. This is because the adjustment of a polity’s regulative capacity to a larger scope of social action requires either larger jurisdictions at L2 or the relocation of competencies to the higher level. When considering the relative costs and benefits of functional and territorial reforms, we consider that government at L1 tends to prefer defragmentation over centralization. This is because defragmentation allows to internalize externalities to a greater extent than centralization. By creating larger territorial units at L2, the externalities of potentially all activities originating within these jurisdiction can be internalised. When centralizing functions, however, only those activities will be regulated more effectively for whom the scope of authority has been adjusted by transferring competencies to L1. Given that the improvement of inter-jurisdictional efficiency requires the concentration of authority, government prefers the status quo over a greater dispersion of authority. A greater dispersion of authority, in particular a greater fragmentation of L2, would decrease inter-jurisdictional efficiency even further and thus be the least preferred choice of government at L1. Complete preference ranking for government at L1: DFr > Cnt > SQ > DCnt > Fr When we turn to citizens’ preferences, we assume that citizens share government’s interest in the effective regulation of social action. As a consequence, citizens' preferences with regard to the outcome of jurisdictional change to improve inter-jurisdictional efficiency correspond to the preference ranking of government at L1. Complete preference ranking for citizens: DFr > Cnt > SQ > DCnt > Fr Allocative Efficiency The second dimension of the efficiency of public goods refers to the satisfaction of citizens’ preferences. In liberal democracies, governments want to produce public goods that satisfy the preferences of its citizens (or the electorate, for that matter). Demand for jurisdictional reform is thus more likely when a government sees its capacity to effectively meet the demands for public goods of citizens reduced. Government will be

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less able to satisfy the preferences of citizens when citizens’ preferences become more heterogeneous. In the literature it is argued that preference homogeneity among the population in a given jurisdiction is a determinant of allocative efficiency. Population homogeneity, in turn, tends to be seen as the consequence of population's size (see Alesina & Spolaore 2003). Thus, population growth, by increasing preference heterogeneity, will adversely affect government's ability to satisfy the preferences of population. Thus, we would expect demand for jurisdictional change to arise when there is sustained population growth. With regard to ideational demand conditions, governments might re-evaluate the effectiveness of jurisdictional properties when the satisfaction of citizens’ preferences is stressed by political ideologies. Allocative efficiency shares, for example, an affinity with ideological movements that centre on strengthening local democracy or greater service orientation of public administration (e.g. Bürgernähe). The improvement of allocative efficiency implies a preference for jurisdictional reforms that disperse authority.8 With regard to the form of jurisdictional change, governments at L1 will prefer the type of reform that allows them to satisfy citizens’ preferences to a relatively greater extent. In general, we assume that this holds for fragmentation. The creation of smaller jurisdictions will increase their internal homogeneity. In contrast, the transfer of competencies to L2 would leave the level of preference heterogeneity constant and thus would not improve allocative efficiency. Given that the improvement of allocative efficiency requires the dispersion of authority, government prefers the status quo over a greater concentration of authority. A greater concentration of authority, in particular a greater defragmentation of L2, would decrease allocative efficiency even further and thus be the least preferred choice of government at L1. Complete preference ranking for government at L1: Fr > DCnt > SQ > Cnt > Dfr When considering citizens’ preferences, we assume that citizens share government’s interest in the satisfaction of their preferences. As a consequence, citizens' preferences with regard to the outcome of jurisdictional change to improve allocative efficiency correspond to the preference ranking of government at L1. Complete preference ranking for citizens: Fr > DCnt > SQ > Cnt > Dfr Cost Efficiency Given that governments operate under resource constraints, governments have an interest in producing public goods cost-efficiently. As a consequence, governments are more likely to consider changing the jurisdictional structure when it needs to reduce the production costs of public goods. With regard to material demand conditions, a change in the properties of jurisdictions at L2 is therefore more likely when the resources for public good production available at L1 become scarcer. This will be the case when the revenue of government at L1 is decreasing. This can be the result of an economic

8 Proponents of grass-root democracy, for example, argue that satisfaction with and thus support for democracy is a function of the responsiveness of the political system. This responsiveness, it is argued, depends on local knowledge, interaction between citizens and officials as well as on relatively homogenous preferences.

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recession or a shrinking population (and hence shrinking tax base). With regard to ideational demand conditions, greater attention to the costs incurred by public good production will be associated with ideologies that stress fiscal discipline and the elimination of waste in public good production. New Public Management (NPM) appears to be the prime example of a public service doctrine focusing on the elimination of inefficiencies in the public sector. In the case of demand for jurisdictional change as a consequence of fiscal pressures, the direction of jurisdictional reforms cannot be specified as unambiguously as for other demand conditions. Whereas fixed costs could be reduced by the concentration of authority through the creation of larger jurisdictions, a similar effect could be achieved by some form of dispersion of authority. As can be observed in some instances of administrative reforms, governments at L1 delegate tasks to L2 without providing L2 with

more resources to accomplish the added workload.9 When aiming to reduce production costs, government at L1 will prefer the type of reform that reduces inefficiencies in public good production to a relatively greater extent. Based on the widespread belief in the superiority of reducing costs through the creation of larger territorial units (Marks and Hooghe 2000), we hold that governments are more likely to prefer defragmentation. This belief rests on the ability of defragmentation to afford government at L1 greater economies of scale in the production of public goods. When the number of jurisdictions is reduced, the infrastructure of the remaining jurisdictions will serve a greater number of citizens and, as a consequence, the costs of producing public goods per citizen will be reduced. In contrast, the centralization of functions at L2 and, particularly, an increase in the number of jurisdictions are less, if at all, suited to reduce the costs of public good production and are thus less attractive than the status quo for government at L1. Complete preference ranking for government at L1: DFr > DCnt > SQ > Cnt > Fr When taking citizens’ preferences into account, we hold that citizens share government’s interest in the economical production of public goods. As a consequence, citizens' preferences with regard to the outcome of jurisdictional change to reduce production costs correspond to the preference ranking of government at L1. Complete preference ranking for citizens: DFr > DCnt > SQ > Cnt > Fr 3.2. Initiation of jurisdictional change in the political arena In the political arena, governments at L1 pursue two specific interests: expanding their power and reducing the transaction-costs of governing.

9 Economic or NPM models of government reform do also not suggest a distinct direction of jurisdictional change. Inefficiencies could be either reduced by eliminating the opportunity for rent-seeking of lower level officials by centralizing authority or through the realization of economies of scale as a consequence of defragmentation. Alternatively, inefficiencies in public good production could be reduced by increasing the competition reducing the dispersion of authority or by increasing the competition among jurisdictions through greater decentralization (Aberbach and Christensen 2003).

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Power The execution of functions often is a rival good between different levels of government. In political science, it is common to assume that governments want to increase their range of competencies. Since governments at lower levels usually will resist attempts by governments at L1 to centralise functions, the latter will initiate jurisdictional change when the capacity of local government to resist such change is weakened. Local government will possess less effective veto-power when its dependence upon the cooperation with higher-level government increases. This might be the case when, for example, local government is in need of resource transfers from the higher level. An ideational demand condition for a greater centralization of competencies is the rise of collectivist models of governance. Collectivist models prioritize the group and favor a concentration of authority at the political centre (in the service of fostering coherence and unity of the polity) (Aberbach and Christensen 2003). When government at L1 initiates jurisdictional change to increase its competencies, it will prefer reforms that concentrate authority. Among authority-concentrating reforms, government will prefer reforms that increase its power to a relatively greater extent. Since a decrease in the number of jurisdictions does not add any competence to government’s portfolio, it will prefer centralization over de-fragmentation. Since government at L1 seeks the centralization of functions, the dispersion of authority, in particular the decentralization of competencies to the lower level constitute its least preferred options. Complete preference ranking for government at L1: Cnt > DFr > SQ > Fr > DCnt When we consider the preferences of local government, we believe that local government, as government at L1, prefers to increase its competencies. Confronted with the prospect of jurisdictional change, it would thus prefer reforms that disperse authority. Given that it seeks to increase its competencies, local government prefers most the decentralization of competencies. Since a greater fragmentation of the polity does not have any consequences for the range of competencies it possess, it prefers the status quo over greater fragmentation. Local government least prefers reforms that would concentrate authority. Since a greater de-fragmentation of the polity would mean the elimination of some jurisdictions and thus the loss of all their functions and powers, it can be expected to particularly reject defragmentation.10 Complete preference ranking for local government: DCnt > SQ > Fr > Cnt > DFr Transaction Costs A second goal of government in the political arena is to minimize transaction costs of governing, i.e. the ‘costs of specifying and enforcing contracts that underlie exchanges’ (North 1984: 7). In polities in which the lower level implements policies on behalf of the

10 This preference ranking assumes uncertainty about the outcome of re-drawing of administrative boundaries. Under conditions of uncertainty, local officials do not know whether they lose their position as a consequence of a reduction in the number of jurisdictions. We will consider the consequences for bargaining when local officials know about the outcome at a later section in this paper.

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higher level, transaction costs arise because L2 acts as an agent of L1. In this agency relation, government at L1 wants its policies to be implemented in a way that reflects its intentions (and it wants its policies to be implemented homogenously within L2). As in any other agency relations, information about the compliance of local government in implementing policies is distributed asymmetrically. In order to prevent or reduce moral hazard by local government, government at L1 needs to invest resources to verify the true performance of local government and, if need be, to sanction and correct their behavior (Tullock 2005 [1965]: 197ff). Governments at L1 are thus more likely to consider changing the properties of jurisdictions when there is an increase in the costs of monitoring and sanctioning local government. Recent formulations of Principal Agent Theory suggest that the (perceived) likelihood of defection by agents is mediated by shared interests or ideological outlooks between the principal and the agent (see Bendor et al 2001). Thus, in the context of relations between governments at different levels, transaction costs conceived of as a function of the ideological distance between office holders at the two levels. This proposition, in turn, implies that transaction costs change when there are changes in the ideological composition of local government. (We consider changes in the ideological distance also to occur when there is a change in the proportion of jurisdictions in which the partisan affiliation of the incumbent office holder differs from the partisan affiliation of government at the higher level.)11 When initiating jurisdictional change to reduce transaction costs, government at L1 will prefer reforms that concentrate authority. With regard to the form of jurisdictional change, governments would prefer the type of reform that reduces the transaction costs to a relatively greater extent. In polities that are characterized by such agency relations between L1 and L2, local government is likely to execute a wide array of tasks on behalf of L1. Controlling the agency relation requires L1 to control the agent’s performance across the entire range of delegated tasks. As a consequence, the reduction in the number of jurisdictions (and hence the number of local governments acting as an agent for L1) reduces transaction costs to a larger extent than the centralization of a limited number of functions. The greater dispersion of authority, in particular the increase in the number of jurisdictions would increase transaction costs and is therefore ranked at the bottom of L1’s preference order. Complete preference ranking of government at L1: DFr > Cnt > SQ > DCnt > Fr When we consider the preferences of local government with regard to the agency relation, we hold that it would prefer reforms that increase its autonomy. It thus prefers the greater dispersion of authority. Among the reforms that disperse authority, local government prefers fragmentation over decentralisation. This is because an increase in the number of jurisdictions at L2 reduces the ability of government at L1 to control local governments to a greater extent than the decentralization of functions. Local government least prefers reforms that would concentrate authority. Since a greater de-fragmentation of the polity would mean the elimination of some jurisdictions and thus the loss of all their functions and powers, it can be expected to particularly reject defragmentation.

11 In this case, it is difficult to unambiguously classify this demand condition as being of either a material or ideational type. A change in the ideological distance between different levels of government could qualify as an ideational and material demand condition.

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Complete preference ranking of local government: Fr > DCnt > SQ > Cnt > DFr 3.3. Initiation of jurisdictional change in the cultural arena With regard to the expression of political identity, the goal of government at L1 is to maintain the cultural integrity of the polity. Thus, we consider (perceptions) of changes in or threats to the cultural unity of the polity as a situation in which demand for jurisdictional change is likely to be voiced. Cultural integrity might be perceived at risk when, for example, jurisdictions at L2 demand greater autonomy or attack culturally dominant groups in the polity. In addition to threat perceptions, the rise and fall of ideas that emphasize cultural integrity also has the potential to create demands for jurisdictional change. As Marks and Hooghe (2000: 806) have observed, (regional) nationalisms are powerful forces ‘in structuring views about the territorial allocation of authority’. When government at L1 initiates jurisdictional change to preserve cultural integrity, it is more likely to prefer reforms that concentrate authority. This is because greater concentration of authority reduces the means of minority groups to challenge the polity’s cultural integrity. With regard to the form of jurisdictional change, government at L1 will prefer reforms that promote cultural coherence to a relatively greater extent. We consider this to be the case for defragmentation. In contrast to the partial reduction of their autonomy as a consequence of centralizing competencies, the reduction of territorial units as a consequence of defragmentation will lead to their complete integration with the majority group. Thus, in case of authority-concentrating reforms, national government will prefer defragmentation over centralization. Since a dispersion of authority, particularly its greater fragmentation, would undermine governments’ interest in preserving cultural integrity, it prefers the status quo over reforms that disperse authority. Complete preference ranking for government at L1: DFr > Cnt > SQ > DCnt > Fr When turning to citizens’ preferences, their primary interest in the cultural arena is to express their local identities. Faced with the demand for jurisdictional change, they would thus prefer reforms that enable them to do so to a greater extent. They will prefer reforms that decentralize competencies.12 Since the greater fragmentation of the polity does not contribute to the expression of traditional, local identities, citizens will prefer the status quo over a further fragmentation. A greater concentration of authority would be less preferred by citizens since it would reduce their ability to express local identities. Since the elimination of jurisdictions would threaten citizens’ ability to express their local identities altogether, defragmentation is their least preferred form of jurisdictional change. Complete preference ranking for citizens: DCnt > SQ > Fr > Cnt > DFr

12 This specification rests on the assumption that the existing boundaries of jurisdictions are accepted by the majority of citizens in the jurisdictions at L2.

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3.4. Determining Preferences When we examine the preferences for jurisdictional change, we see that the preferences of stakeholder are neither consistent within and across arenas (see Figure 5).

Figure 5: Preferences for Jurisdictional Change

Stakeholders do not just vary in their preference for the type of reform (i.e. functional or territorial reforms), but also with regard to the direction of jurisdictional change. Such an ambiguity, however, obstructs our interest in formulating general expectations about the outcome of jurisdictional change. In order to make predictions about the likely outcome of the bargaining stage, we need to determine the preferences stakeholders will pursue at the bargaining stage. With regard to government at L1, we hold that the preference for jurisdictional change is contingent on the demand condition that led to the initiation of jurisdictional change. The preferences of government at L1 regarding the form of jurisdictional change thus depends on the specific interest it wants to address with reform. With regard to preferences of stakeholders at L2 we hold that the preferences to be pursued are

CULTURAL Arena

Interests Cultural integrity

Preferences Defragmentation

Preferences Decentralization

L1 Gov.

POLITICAL Arena

Interests Power Control

Pref. Centralization Fragmentation

Pref. Decentralization Fragmentation

ADMINISTRATIVE Arena

Interests Inter-jurisdictional efficiency

Allocative efficiency

Production costs

Preferences Defragmentation Fragmentation Defragmentation

Preferences Defragmentation Fragmentation Defragmentation

L1 Gov.

L2 Citizens

L2 Citizens

L1 Gov.

L2 Local Gov.

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determined by the relative salience of the consequences of jurisdictional change. As research into the psychology of decision-making has shown, preferences of actors tend to be sensitive to the presentation of options. What actors want often is not (merely) determined by the consequences of different strategies but follows from the practices of high-lightening and back-grounding of specific situational aspects (Kahneman and Tversky 1981). Applying framing theory to the study of jurisdictional change, we hold that the preference of stakeholders at L2 during bargaining for jurisdictional change is determined by the type of distributional consequences of jurisdictional change that stands out in that process. For example, when citizens primarily associate jurisdictional change with the reduction of the costs of producing public goods, then citizens are likely to prefer jurisdictional change through defragmentation. If, however, citizens see jurisdictional change primarily as affecting their ability to express local identities, then citizens are more likely to prefer the dispersion of authority (through either decentralization or fragmentation). Summary In this section, we specified the conditions under which government at L1 is likely to initiate jurisdictional reforms and the preferences of stakeholders for the type of jurisdictional change. The investigation of the material demand conditions for jurisdictional change revealed that change to the properties of jurisdictions is more likely under conditions of socio-economic and demographic change, increasing fiscal constraints, an increase in the ideological distance between levels of government or the emergence of a threat to a polity’s cultural integrity. We also suggested that changes in the salience of ideas regarding the ‘adequate’ distribution of power, norms of fiscal responsibility and ideologies prioritising cultural homogeneity to constitute the ideational demand conditions for jurisdictional change. Moreover, we hold that stakeholders’ preferences for the form of jurisdictional change are context-dependent. As a consequence, predictions about the outcome of jurisdictional change are only possible when we know the condition that led government at L1 to initiate jurisdictional change and the relative salience of the consequences of jurisdictional change for stakeholders at L2. We investigate the latter point in the following section. 4. Bargaining for jurisdictional change We defined bargaining for jurisdictional change to take place primarily between government at L1 and citizens at L2. Given the electoral accountability of government to citizens, their preferences constrain government’s ability to pursue its preferences regarding the type of jurisdictional change. If government’s preference matches the preferences of citizens, the bargaining process will be rather consensual and the outcome is likely to reflect government’s preference. If, however, citizens and governments hold different preferences regarding the type of jurisdictional change, government is more likely to adapt its preferences to public opinion in order to reduce the political costs of reforms. However, as we argued above, the preferences of both government and citizens are context-dependent. Government’s preferences depend on the demand condition that led government to initiate jurisdictional change. Citizens’ preferences depend on the relative salience of the distributional consequences of jurisdictional change. Thus, to make more specific predictions about the outcome of jurisdictional change, we need to specify the determinants of the relative salience of

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citizens’ interests affected by jurisdictional change. What determines whether citizens associate jurisdictional change primarily with affecting inter-jurisdictional efficiency or production costs on the one hand, or with changing allocative efficiency or citizens’ collective identity on the other?

We hold that the relative salience of the consequences of jurisdictional change in the public debate is the consequence of a political process in which specific consequences are made salient (Benford and Snow 2000). For a certain perspective on an issue to be salient, a frame needs to be mobilised. The mobilisation of frames, however, requires actors that invest resources in its propagation (i.e. entrepreneurs). However, an interest in making a specific dimension of an issue salient is not sufficient for effectively mobilising a frame. Rather, the chances for making a perspective salient are mediated by the availability of resources (or an opportunity structure) to mobilise the frame among the targeted audience. Thus, when seeking to specify the conditions under which a specific consequence of jurisdictional change is salient, we need to investigate the mediators of framing. Hence, the question to be answered is ‘who is willing and capable of engaging in framing jurisdictional change?’. Here, we suggest the following answers. On the one hand, government at L1 has a motivation to engage in framing. Given that it wants to realise its preference for jurisdictional change, it has an interest in highlightening the consequences of jurisdictional change that are likely to win citizens over. For example, when government pursues the preference of defragmentation, it is likely that it will high-light the (beneficial) consequences of this type of jurisdictional change with regard to inter-jurisdictional efficiency and production costs. (We refer to the salience of these dimensions of jurisdictional change as the ‘efficiency frame’). Moreover, government also has the resources to engage in framing. Due to its agenda-setting power and privileged access to media, it possesses the capacity to determine the terms of the public debate on jurisdictional change. On the other hand, local government also appears as an actor motivated to act as a frame entrepreneur in processes of jurisdictional change. As the elaboration of preferences indicated, when government at L1 wants to pursue defragmentation, the preference of local government is diametrically opposed. As a matter of fact, the option most preferred by government at L1 threatens the very existence of L2. Thus, mobilising popular opposition against jurisdictional change through defragmentation will be a matter of survival for local government. In such a case, reference to the adverse consequences of defragmentation for the ability of local government to satisfy citizens' preferences or the ability of citizens to express collective identities appears as a prime strategy to attract citizens’ attention. (We refer to the highlighting of these two implications of jurisdictional change as the ‘participation frame’ and ‘identity frame’ respectively). However, we see the mobilisation of the two frames by local government to be mediated by two resource constraints. On the one hand, we hold that the chances for local government to increase the salience of local identities will be promoted when such a frame is accepted and transmitted by civil society. When a dense associational structure at the local level exists, the chances are higher that such a frame will be reinforced and salient among citizens (Aldrich 2008). On the other hand, for popular protest to have a chance of inducing a change in L1’s preferences, such protest needs to be widespread, i.e. it cannot be exclusive to a small number of affected jurisdictions. The need to mobilise the participation or identity frame beyond one jurisdiction, requires local governments to coordinate their entrepreneurial activities. These mediating conditions

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suggest that even when local government has the motivation to engage in framing, their effort might not be effective when society is relatively atomised (i.e. low density of associational structure) and / or local governments are not able to coordinate their efforts towards frame mobilisation. Moreover, government at L1 might be able to pre-empt such efforts at frame-mobilisation by compensating local government actors at L2 for losses, thereby removing the motivation of local government to engage in framing. In this context it is important to note that government need not to compensate office holders in all jurisdictions that are potentially affected by jurisdictional change. Given that the effectiveness of framing by local government is contingent on the coordination of entrepreneurs across jurisdictions, reducing the number of local governments that have an interest in mobilising the participation or identity frame might already be sufficient for undermining the chances of increasing the salience of participation and identity implications of jurisdictional change. Based on these conditions of frame mobilisation, we can derive some more expectations regarding the outcome of jurisdictional change. When government pursues de-fragmentation, the bargaining with citizens will be rather consensual and reflect the preferences of government at L1 when the efficiency-frame is salient. Such a situation is particularly likely when civil society is relatively atomised, local governments are not able to coordinate their protest or government at L1 compensates (some) local government actors for their losses. If, however, the participation or citizen frame is salient (or government at L1 anticipates their mobilisation), then jurisdictional change has the potential for conflict between government and citizens. In such a case, government is more likely to adapt its preferences to public opinion.

5. Explaining recent jurisdictional change in Germany We now illustrate how this framework can help us to understand instances of jurisdictional change. We focus on recent jurisdictional reforms in Germany, in particular on reforms at the county level. Almost all of the German Länder underwent some form of jurisdictional change since 1990 (or have announced it for the near future) (Wollmann 2010). When we examine the outcome of these reforms, we observe a variation between East and West German Länder: whereas East German states have changed the county-level through both decentralisation and defragmentation, West German (WG) states have modified the properties of counties through decentralization only. With regard to our typology of jurisdictional change, the reforms in EG and WG correspond to type IV and type VII reforms. What explains this variation in the form of jurisdictional change within Germany? We defined the outcome of jurisdictional change to be the result of a bargaining process between stakeholders of jurisdictions at different levels of government. Thus, the outcome of jurisdictional change processes reflects their preferences and relative power. With regard to jurisdictional change at the county level, state governments constitute the stakeholder at L1, actors the county level constitute stakeholders at L2. In order to account for the variation in the outcome, we will examine the preferences of state governments (L1) in East and West Germany first. Here, we already observe that state governments in East and West Germany varied in their (publicly stated) preferences. Whereas the governments in the East aimed to pursue decentralization cum defragmentation from the very beginning, WG governments did not, at any stage, include

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defragmentation in their reform proposals. Thus, the variation in reform outcomes seems to reflect a variation in government’s preferences for county reforms between East and West Germany. What, then, explains the variation in preferences for particular types of jurisdictional change? We argued that government’s preferences for the type of jurisdictional change are conditional upon the demand condition leading to the initiation of change. Hence, we contend that variation in government’s preferences between East and West Germany has its origin in different demand conditions existing within Germany. We will thus examine the demand condition that induced state governments to initiate jurisdictional change. Both West and East German governments introduced jurisdictional reforms as a strategy to cope with fiscal pressures. Most of the German Länder are confronted with increasing public debt and the prospect of a declining population. Modifying the properties of jurisdictions has thus been an attempt to reduce production costs of public services (Wollmann 2010). According to our theoretical framework, governments at L1, when pursuing jurisdictional changes to address fiscal pressure, are likely to prefer defragmentation (type III) over decentralisation (type VII). Moreover, it will pursue a combination of these reforms (type V) when it is confronted with particularly urgent fiscal pressure. Based on this theoretical framework, we would expect that variation in the comprehensiveness of jurisdictional change – change in two jurisdictional properties (type V) vs. change in one property (type III or VII) – is the consequence of variations in fiscal pressures. Furthermore, governments that modify only one jurisdictional property in response to fiscal pressures should do so by defragmentation (type III). When we examine indicators for fiscal pressures – public debt and projections of demographic change – we do observe that East German governments are confronted with greater fiscal pressures than their counterparts in West Germany (see Figure 6).

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Figure 6: Demand Conditions for Jurisdictional Change in the German Länder: Fiscal Pressure13

On the one hand, the public debt of each East German state has increased considerably more than for West German states in the period of 1995 to 2005. Moreover, as demographic projections have consistently indicated, East German states will suffer from a greater decrease in the size of its population than states in West Germany. Thus, the variation in the comprehensiveness of jurisdictional change between East and West Germany (change in two jurisdictional properties vs. change in one property) can be accounted for with the variation in the demand conditions triggering jurisdictional change. However, West German governments deviate from the prediction of the theoretical framework with regard to the type of jurisdictional change they pursue: rather than seeking a (relatively greater) reduction in the costs of public goods through

13 This figure is based on information contained in Sommer 2004 and Statistische Ämter des Bundes und

der Länder.

Baden-Wuerttemberg

Bavaria Hesse

Lower Saxony North Rhine-Westphalia

Rhineland-Palatinate

Saarland

Schleswig-Holstein

Brandenburg

Mecklenburg- Western Pomerania

Saxony

Saxony-Anhalt

Thuringia

West Germany Mean

East Germany Mean

0

20

40

60

80

100

120

140

-20 -15 -10 -5 0 5 10

Ch

an

ge

in

pu

bli

c d

eb

t, 1

99

5 t

o 2

00

5 (

in %

)

Projections of population growth, 2001 to 2020 (in %)

East Germany

West Germany

The size of the dots represents the size of the states’ public debt per capita in 2005

22

defragmentation, all West German state governments pursue decentralization.14 Why do the governments of West German states not pursue jurisdictional change through defragmentation? We suggest the answer to this question to be found in the (anticipation of the) bargaining process leading to the decision on the form of jurisdictional change. We suggested that governments at L1 are likely to deviate from their preferences when the political costs of (a specific type of) reforms outweigh its benefits. With regard to political reforms in democracies, acting against the interests of the public and thus risking electoral defeat is the primary type of political costs. Thus, we would expect that governments do not pursue defragmentation when they consider this type of jurisdictional change to be associated with political costs. As a matter of fact, some government actors in West Germany explicitly express their reluctance to pursue territorial reforms due to the political costs they anticipate if they were to pursue jurisdictional change through defragmentation.15 Moreover, when we examine previous instances of jurisdictional change through defragmentation, we also see why state governments in West Germany are likely to expect protest by citizens (and thus political costs) in any future instance of such reforms. In WG, the previous instances of jurisdictional change took place in the late 1960s and early 1970s. These reforms were accompanied by widespread popular protests that were fuelled by a high salience of the citizen and identity frame. Citizens perceived the forced fusion of jurisdictions primarily as a loss of the ability to participate in local affairs and to express traditional collective identities (Mecking and Oebbecke 2009). In addition to popular protest, the territorial reforms triggered a wave of legal challenges whose resolution occupied governments until the 1980s (or even beyond). Thus, given the association of previous instances of defragmentation with political costs as a consequence of the high salience of citizen and identity frames, West German governments are likely to perceive any future round of defragmentation as being laden with considerable political risks. As a consequence, when addressing fiscal pressure through jurisdictional change, governments choose the option that is politically feasible: decentralisation. We can strengthen our conjecture about the role of anticipated political costs in government’s choice of a type of jurisdictional change by comparing the West German reform experience with the previous instance of defragmentation in East Germany – the group of states that have pursued jurisdictional change through defragmentation (in addition to decentralisation). Here, the previous instance of defragmentation occurred

14 The absence of territorial reforms in response to fiscal pressure becomes even more striking in the light of two additional observations. First, ‘experts’ advising state governments on the design of jurisdictional reforms have consistently argued for jurisdictional reforms that include defragmentation (Hesse 2004a, Hesse 2004b, Hesse 2007, Hesse 2010a, Hesse 2010b) Second, despite the reluctance of West German governments to change the territorial structure by legislative fiat, a number of West German governments try to modify it by an alternative, bottom-up strategy. We observe that state governments of five (out of eight) (Baden Württemberg, Hesse, Lower Saxony, Rhineland Palatinate, and Schleswig Holstein) territorial states have undertaken measures to promote voluntary, inter-communal cooperation in the provision of services or the voluntary fusion of counties and municipalities. In this context, it needs to be pointed out, however, that defragmentation from the bottom-up is inferior to top-down defragmentation as a strategy to ease fiscal pressures. This is because the budgetary consequences of voluntary inter-communal cooperation or fusion are much more uncertain than those associated with top-down defragmentation. 15 For statements to that effect see, for example, the parliamentary debates on recent laws on administrative reforms in Rhineland Palatinate (Landtag Rheinland Pfalz 2010: 5276, 5281/2) or Saarland (Landtag des Saarlandes 2007: 2320, 2323, 2326, 2328).

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in the early 1990s, in the wake of German Unification. In these reforms, popular protest was much more muted. Local identities and chances for participation were hardly evoked and hence not salient in the process. Thus, East German governments, as a consequence of a different reform experience in the past, were likely guided by a different decision calculus when selecting the form of jurisdictional change. Whereas West German governments are more likely to perceive defragmentation to be laden with political risks, East German governments do not associate such reforms with any heightened risk for their political standing. Given these different evaluations of the political costs, governments vary in the extent to which they consider jurisdictional change through defragmentation to be politically feasible. The theoretical framework also allows to account for variation in the salience of citizen and identity frames in the two reform episodes. We argued that the salience of frames in episodes of jurisdictional change is the consequence of framing activities by political actors, mediated by their opportunity structure to highlight specific consequences of jurisdictional change (i.e. associational density and coordination between local governments). The historical record suggests a considerable role for the strength of civil society in accounting for the differences in frame salience. The reform of jurisdictions in the 1960s and 1970s in West Germany occurred in a context of high social mobilization in the Federal Republic. As a consequence of both socio-economic modernization and cultural change in the wake of the 1968 student protests, citizens’ associations for the participation in local affairs had mushroomed in the late 1960s (Knoch 2009, Mecking 2009, Dicke 2009). Together with Local History Societies (Heimatvereine), these associations became the carrier of popular protest against defragmentation. The jurisdictional reforms in East Germany in the early 1990s, however, took place in a context in which civil society was relatively underdeveloped. During Socialism any form of autonomous association of citizens was repressed. Moreover, the expression of territorially-based identities was discouraged. Thus, in East Germany the carriers of citizens and identity frames did not exist. Thus, variations in the opportunity structure of political entrepreneurs to mobilise ‘participation’ and ‘identity frames’ seem to account for the variation in the salience of these frames in previous instances of jurisdictional change between East and West Germany. In this section, we applied our theoretical framework to explain variation in recent instances of jurisdictional change between East and West Germany. This framework suggests that the variation in the extensiveness of these reforms between East (decentralization cum defragmentation, type V) and West Germany (decentralization, type VII) can be understood as a reflection of the differences in the demand conditions between the two regions. The group of states that introduced the more comprehensive forms of jurisdictional change also faces more severe fiscal pressures. However, this interpretation does not fully account for the reform experience, for it cannot explain why the West German Länder consistently choose decentralization instead of defragmentation to address fiscal pressures. We suggested that East and West German governments differ with regard to their evaluation of the political costs associated with defragmentation. We argued that the decision-calculus of governments regarding the form of jurisdictional change to address fiscal pressures is also shaped by the political costs associated with defragmentation and decentralization. Given different reform experiences in the past, which we suggest to be related to differences in the salience of the reforms’ implication for citizens’ local identity and chances for participation, governments in East and West Germany evaluate costs and benefits of defragmentation

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differently today. Whereas governments in West Germany see defragmentation as an option to be politically too risky to pursue again (and thus choose decentralization), the fiscal gains of such reforms outweighs their political costs for East German governments.

5. Conclusion In this paper, we made some first step towards a theoretical framework for the study of jurisdictional change, i.e. changes to the competencies and size of jurisdictions. We first conceptualised jurisdictions as institutions with distributional consequences. Based on the identification of their effects in the administrative, political and cultural arena, we identified key stakeholders and the conditions that raise the probabilities for governments to initiate jurisdictional change. Change to the properties of jurisdictions is more likely under conditions of socio-economic and demographic change, increasing fiscal constraints, an increase in the ideological distance between levels of government or the emergence of a threat to a polity’s cultural integrity. We also suggested that changes in the salience of ideas regarding the ‘adequate’ distribution of power, norms of fiscal responsibility and ideologies prioritising cultural homogeneity to constitute the ideational demand conditions for jurisdictional change. In a second step, we specified the preferences of stakeholders of jurisdictions that will engage in bargaining for their change. We suggest that, in most instances, higher-level government is likely to prefer a greater concentration of authority through defragmentation. Government’s preference ranking corresponds to citizens’ preferences when they see jurisdictional change primarily as affecting inter-jurisdictional efficiency or the costs of producing public goods. However, when citizens perceive jurisdictional change primarily as affecting their chances for participating in local affairs or to express traditional collective identities, they will be likely to prefer the greater dispersion of authority through decentralization. The form of jurisdictional change is therefore likely to depend on the relative salience of either of these consequences of jurisdictional change for citizens. We consider local government as an important actor in determining the salience of the implications of jurisdictional change. Its capacity to mobilise a participation or identity frame will be determined by the density of civil society and local government's ability to coordinate protest across jurisdictions.

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