Marble cake dreaming of layer cake : the merits and pitfalls of disentanglement in German federalism reform

Abstract

This article explains the zigzag of the stepwise federalism reform in Germany by accessing the theoretical concept of institutional incongruity. It is argued that the existing imbalance between competencies, policy problems and fiscal resources was further exacerbated as actors adopted inconsistent institutional ‘layers’ during the sequential reform. Two case studies on higher education and unemployment policy reveal that actors finally reverted to joint decision-making and revived ideas of solidarity in order to remedy inconsistent reform results, although ‘disentanglement’ and competition had been the leitmotivs underlying the first reform step. The article confirms that institutional congruity is hardly attainable in federations. Reform attempts aiming at disentangling responsibilities and fiscal resources encounter insuperable difficulties, because policy issues more than ever transcend the borders of single territorial units and need joint financing. The study concludes by discussing the question whether joint decision-making – compared to dual resp. ‘layer-cake’ federalism – owns a specific democratic quality.