This chapter examines how public policies are designed and implemented at the municipal level. The characteristics of municipal decision-making processes are analysed on the basis of the general institutional setting. The concepts of consociational and competitive democracy are essential to understand variance at the municipal level and to allow a structured comparison of local decision-making processes in the different German Länder. In the following, we concentrate on the central modernisation impulses since the 1990s, which can be attributed to two somewhat contradictory trends: economisation and participation. Regarding economisation, we distinguish:

• • administrative modernisation through elements of new public management (NPM), in particular the German ‘new steering model’ and ‘new financial management’;

• • cost-saving programmes in the context of the current municipal budgetary crisis.

Regarding participation, we focus on:

• • amendments of the respective municipal constitutions, in particular, strengthening the role of the mayor and integrating more elements of direct democracy;

• • the renaissance of civic participation and the ‘discovery’ of active citizenship, that means the concept of a ‘citizens’ community’.

The guiding question for our analysis concerns the way in which municipal politics takes up these measures, and whether changes in municipal decision-making processes have been brought about. Against the backdrop of these considerations, the last part of this chapter focuses on the further advancement of municipal democratisation.

Local policy processes: a complex institutional framework

The approximately 11,300 German municipalities vary enormously in size. While reforms of the municipal territories have reduced the number of municipalities and augmented their size in order to achieve more efficient administration units, these reforms have been carried out quite differently in the German Länder . In North Rhine-Westphalia (396 municipalities) and the new Länder of the former German Democratic Republic (GDR) (220-907 municipalities) in particular the number of municipalities was reduced. Rhineland-Palatinate (2,306 municipalities), Bavaria (2,056 municipalities), Schleswig-Holstein (1,116 municipalities) and Baden-Württemberg (1,101 municipalities), however, still have a high number of small and very small municipalities.

Municipalities in the legal state structure

As well as the federal state and the German Länder, the German municipalities are constitutionally guaranteed (Article 28 II of the Gundgesetz [GG], or Constitution) self-governing bodies. As such, they are a separate level in the administrative architecture of the federal state organisation. Judicially, however, they are part of the Länder and therefore subject to their regulatory law and decisional authority.