German cities have a history of autonomy from higher tiers of governance that dates back to the Middle Ages, long before Germany became established as a modern nation state (Conradt, 2001). This was largely because most of what is now Germany was part of the East Frankish part of the Holy Roman Empire that was created
following the death of Charlemagne in AD 843. This empire, which some Germans later termed the First Reich, was not a ‘state’ in the modern meaning of the term, but
rather a loose grouping of territories held together by some confederate features (Gunlicks, 2003). Crucially, its lack of a centralised structure meant that large cities were very powerful and largely autonomous actors. This legacy, together with the fact that much of the empire’s territory was outside the contemporary borders of
‘Germany’, illustrates how the historical development of a German nation state differed markedly from either that of England or the wider United Kingdom.
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The Holy Roman Empire lasted until the Napoleonic Wars, when the occupying French introduced a much more centralised system of government administration in their new Kingdom of Westphalia – including what was then the tiny village of Gelsenkirchen. However, following Napoleon’s defeat, the Congress of Vienna awarded Westphalia and the Rhineland to Prussia and its new governor, Baron Ludwig Vincke, set about organising the province’s administration along Prussian lines (Engel, 1969). Notably, Prussia’s eighteenth-century ruler Frederick II (‘the Great’) had introduced various reforms that bore Napoleonic hallmarks – such as giving many property-owning men the right to vote, establishing state-funded universities, liberalising commerce, developing a highly-trained army of conscripts and instituting a legal code (Acemoglu et al., 2011, Gildea, 1987, Bogumil and Holtkamp, 2006). Crucially, however, Prussian leaders were much less keen to adopt the French model of local administration. Indeed, Baron Karl vom Stein, the Prussian First Minister for much of this period, sought to construct a ‘system of urban
government in accordance with a philosophy contrary to that of Napoleon’ (Norton, 1994, p. 238). This meant decentralising power to the grass roots, rather than developing a strong central authority that nurtured nationalistic fervour.
As a result, a Civic Ordinance of 1808 gave the towns and cities responsibility for overseeing economic modernisation and nurturing civic pride, and extended the franchise for local councils to all male property owners and salaried professionals. It also introduced a powerful (albeit collegial) executive in each city in the form of a
Magistrat that was appointed by elected councillors. From 1831 onwards the
Magistrat was able to veto council decisions (Bogumil and Holtkamp, 2006), in contrast to the system of committees and ceremonial mayors that existed in England. This meant that Prussian municipalities were able to take decisions much easier than their English counterparts, and had substantial capacity to shape the local area during this period (Wollmann, 2004).
Some have argued that Stein introduced a decentralised system so that the central Prussian state would not have to finance the rebuilding process after the Napoleonic Wars (Naβmacher and Naβmacher, 2007). Indeed, the extent of devolution to the local level is all the more surprising considering the otherwise authoritarian nature of
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nineteenth-century Prussia (Edwards and van der Meer, 2000, Passant et al., 1962). However, regardless of the reasons behind the Civic Ordinance, it meant that municipalities derived their legitimacy from local communities (rather than the centre), because they were responsible for instilling civic pride and modernising the country from the bottom-up. Indeed, it is important to note that councils became firmly established in Prussia at a time when the country was still overwhelmingly rural, and that Stein believed local government would be best placed to oversee a strategy of industrial and economic development.
In order to achieve this, the 1808 Ordinance granted municipalities a power of general competence to undertake any function that they considered to be in the interests of the locality, unless that task was specifically assigned to another government body in law (Norton, 1994, Wollmann, 2004). Crucially, this power eluded their English
counterparts for another two centuries, which meant that local authorities in England could only undertake activities that were expressly permitted in legislation. In Germany, the power of general competence has since become almost synonymous with the idea of lokale Selbstverwaltung (local self-administration), which ensures that municipalities not only have ‘a high degree of autonomy in decision-making, but also a corresponding flexibility in terms of income and expenditure’ (Scherf, 2010, p. 373). This power was enshrined in the post-1945 Grundgesetz (Basic Law), and continues to provide legal authority and legitimacy for local authorities in the present day. In particular, it puts them in a strong position in local governance arrangements and ensured they have retained significant control over revenues.5
Prussia’s governors were helped by being able to tap into a tradition of civic pride that was much stronger than in England (Palmowski, 2002). Furthermore, the introduction
5 In fact, as this chapter will demonstrate, the German concept of lokale Selbstverwaltung actually
results in what Anglophones might more accurately term ‘local self-government’, because it gives municipalities substantial autonomy to take decisions rather than merely administer policy on behalf of other organisations. Ironically, ‘local government’ in England is actually more concerned with
administration and implementation – to the extent that scholars such as Copus (2010) have argued that it is neither ‘local’ nor ‘government’.
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of a wide-ranging – and much admired6 – public education system helped to nurture communal identities and equip people with the skills necessary to help transform Prussia from a feudal to an industrial country (Gerlach, 2010, Gildea, 1987). In addition to education, Prussian municipalities began to provide an increasing range of other services, including parks and recreation, sanitation, infrastructure, utilities, refuse collection, public transport, sports facilities, hospitals, cemeteries,
slaughterhouses and cultural services. These services were overwhelmingly
‘municipalised’ – that is, owned and delivered by the local authority – which provided the council with significant revenue streams. Not only were some of these functions necessary from a public health perspective, but they also facilitated the process of industrialisation, since they ensured that cities had sufficient housing, transport, sanitation, education and other services to support their rapidly increasing populations (Bogumil and Holtkamp, 2006). More importantly for the purposes of this thesis, they demonstrated the degree of capacity within local authorities to deliver these services ‘in-house’, largely independent of central government and non-state actors. To use Hooghe and Marks’ characterisation, nineteenth-century German councils were archetypal Type I ‘multi-purpose authorities’, because responsibilities for policy- making and service delivery were concentrated within the municipality.
As the role of Prussian local government expanded considerably, so did municipal expenditure – to the extent that spending per head doubled between 1883 and 1902 (Palmowski, 2002). The vast majority of this money was borrowed, on the assumption that economic growth and continued industrialisation would lead to higher levels of revenue from business taxes (Gewerbesteuer)in future years. As we shall see later in the chapter however, this debt became increasingly difficult to manage and
contributed towards local government losing influence in the early twentieth century. Nonetheless, Prussian councils enjoyed a large degree of fiscal autonomy. From 1820 onwards, they were permitted to levy the Gewerbesteuer, and from 1891 each
municipality was also able to decide whether to tax a local company according to its
6 Victorian reformers in England were amongst these admirers. British Liberal governments under
William Gladstone tried to adopt the Prussian secondary education system as a model but were blocked by established interests keen to continue with the elitist and limited nature of schools at the time (see Gildea 1987).
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annual revenue, capital holdings or number of employees (Rehm and Matern-Rehm, 2010).
As the nineteenth century progressed, Prussia became the pre-eminent state in the German Confederation (Deutsche Bund)(Passant et al., 1962, Conradt, 2001, Roberts, 2000, Carr, 1991). This meant that most other German states adopted Stein’s
philosophy of civic governance and efficient bureaucracy in order to try and emulate its economic, political and military success (Bogumil and Holtkamp, 2006). Indeed, Prussia became so dominant within the confederation that its rulers were essentially able to dictate the terms of the 1871 unification that created the Second Reich (Carr, 1991, Conradt, 2001). As a result, the Prussian King Wilhelm I became Germany’s first Kaiser (a term meaning ‘emperor’ that derives from the Latin Caesar), and he appointed the Chancellor (the Prussian prime minister Otto von Bismarck) as head of the government. Crucially, although the other states (or Länder) retained many of their previous institutions (not least their monarchies) following unification, the new
Reich constitution incorporated the Prussian principle of lokale Selbstverwaltung. As a result, municipalities from across Germany developed their own approach to delivering utilities, health care and other social services.
In keeping with this principle, the Prussian government passed legislation in 1893 that confirmed local government’s power to levy all ‘material taxes’ (Realsteuer – those that concerned property and businesses), as well as introduce surcharges on the amount of income tax or excise duty that applied within the Land. The law also enabled municipalities to raise taxes if their revenue from direct grants, fees and charges did not cover their expenditure. Indeed, councils were responsible for 40% of all taxation in the Second Reich right up until 1913 (Elsner, 1979). This gave them significant capacity to raise revenue and undertake activities independently of central government.
Although this situation has changed to some extent over the last hundred years, the legacy of Prussia’s preference for lokale Selbstverwaltung, civic pride and bottom-up development is still relevant in contemporary Germany. Indeed, as chapters 4, 5 and 6 of this thesis will demonstrate, this legacy has helped to ensure that German
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English counterparts, and have consequently been able to exercise greater hierarchical authority in decision-making processes.