Metropolitan Governance in Germany - Comparing the Regions of Stuttgart and Hannover

Content

1 Introduction

2 Literature Overview

3 Framework of Analysis
3.1 Theoretical Framework
3.2 Specification of Constructs
3.3 Operationalizations
3.3.1 Formal Strength
3.3.2 Overall Potential Power

4 Study Design
4.1 Methods
4.2 The Cases

5 Comparative Case Studies
5.1 Formal Strength
5.1.1 Legal Base
5.1.2 Election Rule
5.1.3 Decision-Making Rule
5.1.4 Source of Finance
5.1.5 Number of Tasks
5.1.6 Binding Force
5.1.7 Summary
5.2 Overall Potential Power
5.2.1 De-facto Decision-Making
5.2.2 Share of Officials from other Political Levels
5.2.3 Amount of Financial Resources
5.2.4 Number of Staff
5.2.5 Distance to Center of Decision-Making
5.2.6 Summary

6 Discussion and Conclusion

Abbreviations

References

1 Introduction

The issue of cooperation in metropolitan areas has long been on the agenda of both practitioners and theorists. For instance, Major Peters of Boston claimed in an address as early as 1919 that the lack of regional unity had severe adverse effects on his city in economic, social and political terms (Wallis 1994a: 160-161). On the core of this lies the notion that many problems in urban areas cross political and administrative boundaries, thus requiring regional solutions. Some examples for such problems are environmental pollution, traffic congestion, unemployment, poverty and ghetto-building (Hamilton 1999: 280-310; see also Heinz 2000a: 509-514). In practice, various attempts have been made to solve these problems, reaching from informal cooperations in limited issue areas to strong formal regional institutions with extensive competencies (Wallis 1994a, 1994b).

Among scholars, there is an ongoing debate about metropolitan cooperation which is in large parts concerned with the advantages and disadvantages of powerful regional institutions^[1]. This paper explores whether it makes sense at all to speak about the “power” of regional institutions. Even though such authorities have been considerably strengthened in legal terms in some cases, it is questionable whether this translates into increased actual power. After all, some scholars argue that state institutions in general do not have sufficient resources for policy-making in modern societies (Schneider 2000). This paper thus deals with the following question: Do attempts to legally strengthen regional institutions result in an overall increase of their power?

To answer this question, two regional institutions in Germany are examined in a comparative case study, namely the “Verband Region Stuttgart” (VRS) and the “Region Hannover” (RH). The analysis is based on indicators derived from the concept of power by Stokman (1995), who models an actor’s power as consisting of its voting power, resources and access to the decision-making center. It is shown that the RH is stronger than the VRS both in terms of legal strength and potential power. Legal strength of regional institutions indeed seems to translate into actual power. A possible explanation for this is found in the differing institutional surroundings of the two regional authorities.

The study is organized as follows: The next chapter presents a brief overview of different scholarly positions on metropolitan cooperation. In the third chapter, a theoretical framework for the study is developed and the concepts are operationalized. The fourth chapter comments on the methods, while the fifth presents the results of the empirical study. These results are discussed in the sixth chapter which also draws some general conclusions.

2 Literature Overview

An extensive review of the literature on metropolitan cooperation would be beyond the scope of this paper. So this chapter presents a brief overview of the most important arguments in this area.

A large part of the regionalism-literature focuses on the production and distribution of public services in metropolitan areas. For instance, so called reformists argue that large units of government are more efficient in these respects due to economies of scale and increased planning capabilities (Lefèvre 1998: 10). They thus advocate powerful metropolitan institutions in spite of fragmented local governments (e.g., Lightbody 1998; Lowery 2000; Priebs 1999).

This position is strongly resisted by public-choice theorists. They argue that competition is the driving force in producing public services efficiently. In a competitive environment, municipalities will be kept from behaving inefficiently, since this would result in rising costs and taxes, reducing the municipality’s attractiveness for businesses and affluent households (Wallis 1994a: 164-165). In areas with a single unit of government, competition is assumed to be limited because residents cannot “vote with their feet” (Lefèvre 1998: 11), i.e. they cannot move to another community in the same region if they are not satisfied with the public services in their municipality. So for public-choice theorists, competition arising from fragmented political landscapes is a precondition for efficient policies. They thus advocate polycentric forms of regional government (e.g., Ostrom et al. 1961). Other authors supporting fragmentation argue that smaller communities are preferable in terms of democracy since they stimulate higher civic involvement (Oliver 2000), while again others challenge the assumption that suburbs exploit their central cities, thus arguing that there is no reason for metropolitan unification (Hawkins/Ihrke 1999).

More modern approaches towards regionalism often accept the necessity of some kind of regional cooperation. Nevertheless, considerable disagreement about the shape of such authorities exists. For example, supporters of the FOCJ-approach argue that functionally fragmented, overlapping and competing jurisdictions are best suited to deal with regional issues both in terms of efficiency and legitimacy (Frey/Eichenberger 2001). Other scholars challenge this by pointing at the coordination-problems which arise when applying such a fragmented approach (Bollens 1997; Clarke/Stewart 1994).

Finally, advocates of New Regionalism (also labeled Regional Governance) support a radically different approach: They argue that regional policy-making should take place in multi-actor network environments, integrating various political and private actors and using the steering capabilities of hierarchical, collaborative and competitive modes of cooperation at the same time (Benz 2001; Wallis 1994c). This is based on the notion that metropolitan areas face new tasks and conditions of policy-making due to processes of globalization and liberalization. Regional state institutions are assumed not to be able to handle these challenges on their own, but to depend on the cooperation of other actors. “The new regionalists have for the most part given up the ideal of forming powerful general-purpose regional governments. In place of regional governments, they generally advocate regional governance – informal systems of cooperation between local governments that evolve over time (...)” (Swanstrom 2001: 492).

This points to the underlying idea of this paper: Is it possible to create powerful regional state institutions in modern societies by strengthening them legally – or is the very attempt doomed to failure? In the next chapter, a theoretical framework to answer this question is developed.

3 Framework of Analysis

3.1 Theoretical Framework

Since the center of interest in this study is the power of regional state institutions within modern societies, a theoretical framework has to be applied which models convincingly this phenomenon. Volker Schneider’s (2000) concept of the “Organization State” offers such a framework. He argues that in modern, functionally differentiated societies, public institutions do not face an atomized society, but powerful corporate actors, for example interest groups or even their umbrella organizations. Thus political power has become polycentric: Even though the state still has the monopoly on the use of force, repressive methods alone are not sufficient to solve policy-problems. On the contrary, state institutions depend on the cooperation of other corporate actors in policy-making. This cooperation cannot be enforced, but has to be achieved by means of bargaining and negotiation. One possible explanation for this is that democratically legitimized public institutions are not equipped with enough resources to fulfill their ever more complex tasks. Thus they depend on the resources of other (private) actors, be this information, money, expertise or simply acceptance and obediance.

More generally speaking, policy-making within modern societies is assumed to take place within network-structures (Mayntz 1996). These are “charakterized by a predominance of informal, decentralized and horizontal relations in the policy process” (Kenis/Schneider 1991: 32). The emergence of network structures may be interpreted as a sign of weakness and lack of power of state institutions, since they are not able to make important policy-decisions by means of their own authority (Mayntz 1996: 474).

Nevertheless, some lawmakers try to increase the power of public regional institutions by strengthening them legally, as shall be described in the empirical part of this paper. By deduction from the theoretical considerations above, the following hypothesis regarding these attempts is derived:

Hypothesis: Regardless of the legal strength of public regional institutions, their overall power remains relatively small.

It may be questionable whether it makes sense to apply the concept of power within networks, since these are by definition not hierarchically structured. Indeed, power is not regarded a decisive variable in many policy network studies (Melbeck 1998: 535). But as Marin/Mayntz (1991: 16) argue: “While policy networks are predominantly informal, decentralized and horizontal, they never operate completely outside power-dependence relations, i.e. outside asymmetric interdependencies and unequal mutual adjustments between autonomous actors, imbalanced transaction-chains, and vertically directed flows of influence”.

Thus, power can be regarded relevant in network structures. The next section defines the concept of power as it is applied in this paper.

3.2 Specification of Constructs

The power of an actor within a policy-network will be defined in this paper according to Stokman (1995) as the potential to influence valuable collective outcomes. This depends on three elements of power, namely:

- voting power, i.e. the competencies of an actor in the formal decision-making process,
- the resources an actor can use to promote its own preferences, and
- the access an actor can gain to the decision-making center before the actual decision is made.

The effects of these elements can be explained using Stokman’s (1995) two-stage model of decision-making: An actor’s access toward other important actors and its resources constitute its ability to influence other actor’s issue-positions at time t, before the actual decision is made. At t+1, those actors possessing voting power make the decision based on their actual issue positions.

Modeling power this way has several advantages: First, it takes into account the relational character of power (Stokman 1995: 160) – power exists towards the other actors (by influencing their issue positions respectively by imposing decisions on them) and it affects actual decisions to be made within a social system.

Second, it enables to differentiate between formal aspects of power and the actual potential to influence decisions, as it is necessary to deal with the question at hand in this study: The formal strength of an actor consists of its formal voting power, i.e. its legal competencies to make decisions. An actor’s actual potential to influence decisions depends on its de-facto voting power (i.e., the degree by which legal competencies are actually used), the resources an actor can raise to influence decisions and the possibilities it has to gain access to the center of decision-making. The hypothesis stated above would be supported if it were possible to show that an actor’s ability to influence decisions is not influenced by its formal voting power.

But the concept (as applied in this paper) also has several weaknesses. The most severe problem is that by measuring voting power, resources and access, it is not possible to grasp an actor’s actual power – what is measured is its ability to influence decisions, and thus its potential power. Whether an actor really uses its power depends on several issue-specific features, e.g. its interest in a specific decision (Stokman 1995: 165). To measure actual power it would thus be necessary to regard specific decisions within social systems, and to work out for every single case whether the actors affected used their potential powers – an effort which would be beyond the scope of this seminar paper.

The same problem exists with network-analytical approaches toward measuring actual power. For instance, these use centrality within networks to assess an actor’s influence: “Centrally positioned individuals definitely enjoy a position of privilege over those relegated to the circumference. They are hubs, where we can reasonably expect power to concentrate” (Degenne/Forsé 1999: 132). Before calculating the centrality of an actor, it is necessary to describe the crucial characteristics of a network, i.e. its actors, linkages and boundaries (Kenis/Schneider 1991: 41-42). This is not possible within the scope of this paper, because it would require too much resources in terms of both time and money. For instance, Schubert et al. (2001) in a 1998 survey identified about 2000 possibly relevant individuals and about 1000 organizations in their first step when defining an actor network in the Hannover area. Even after several steps of reduction (involving 15 experts), they still ended up with 179 relevant actors.

So for pragmatic reasons, this paper will be restricted to describing the potential power of regional institutions, disregarding whether this power is actually used. This is not very significant if the hypothesis formulated above can be supported: If the potential power of an institution does not grow with its legal strength, then its actual power does not have to be considered, because it already lacks the very possibility to influence decisions. If on the other hand the potential power of an institution grew with its legal strength, then further research would be necessary to work out whether this potential power translates into de-facto power. But this further step cannot be taken within the limits of this paper.

Next, the power concept as drawn up in this section will be operationalized to derive observable indicators for formal strength and potential power of regional institutions.

3.3 Operationalizations

3.3.1 Formal strength

As indicated above, formal strength is defined by a political actor’s formal voting power. To operationalize this concept, one can draw on several authors which use legal categories of strength to classify regional cooperations (e.g. Danielzyk 1999; Heinz 2000a: 520-549). Based on these classifications, the following indicators for formal strength of regional institutions will be applied in this study:

- The legal base of an institution determines the scope of its regulatory competencies. If it is constituted by public law, an institution may issue legislation towards the public in its area. If it is constituted by private law, an institution’s decisions are restricted to its members, while an informal base would leave it without the possibility to issue substantial decisions.
- The election rule is important in determining the legitimacy of an institution and thus the legitimacy and impact of its decisions. Authorities in general are only regarded legitimate if the public can recognize itself within them and identify itself with them (Lefèvre 1998: 15). So direct election provides high legitimacy, while indirect election or even appointment or co-optation provide lower legitimacy.
- An authorities ability to make decision depends on its formal decision rule. As Hix (1999: 68-69) notes, under unanimity each member of a body can block a decision. Thus gridlock danger is high and solutions in controversial issues can hardly be achieved. Under majority voting, an institution’s decision-making ability is higher.
- The source of an institution’s financial resources is important in determining its autonomy from other actors. If it has independent sources of finance (e.g., the right to collect own taxes), its degree of financial autonomy is higher than if it has to rely on other actors in this respect.
- The number of tasks assigned to an institution is an element commonly used in describing the strength of regional authorities. The usual distinction is between functionally oriented cooperations which perform only one or just a few tasks, and territorially oriented ones which perform many different tasks. This determines an institution’s discretion, which is higher the more tasks it is responsible for.
- Finally, the binding force of an institution’s decisions determines its legal strength. It can be regarded strong if its decisions are binding for a specific group of reference, while the ability to merely make advisory decisions is a sign of legal weakness.

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^[1] See chapter 2 for a comprehensive overview of this discussion.