Getting close to citizens – decentralised government and administration systems “Made in Germany”

Countries all over the world face the challenge of meeting the growing expectations of their citizens for a modern state, but with limited public funds and a scarcity of administrative staff. Above all, the increasingly-educated and organised citizens demand more participation and better local services. The decentralisation of the governmental and administrative system starts right here:

Decentralisation refers to the transfer of decision-making powers, responsibilities and resources from national to sub-national levels, enabling public services to be implemented in a citizen-friendly, transparent, demand-oriented and efficient manner. Decentralised administrative units know the needs of their local population and can involve them directly in decision-making processes, thus promoting the political participation of citizens and contributing to strengthening a vibrant democracy.

The immense importance of political and administrative decentralisation in Germany derives from the country’s long historical tradition of uniting sovereign territorial small states with pronounced competences, in contrast to an imperial or confederation of states level. The historically-substantiated significant role of the sub-national decentralised level, the subsidiarity principle and the principle of solidarity are central to the exceptional performance of the German state and its social cohesion.

The principle of subsidiarity, which is firmly anchored in Germany, describes the performance of a task by the level closest to the topic and the citizen. An essential feature of the German administrative system is therefore the strong position of local self-government. Each administrative level is responsible for the sub-tasks that it can best perform. The different levels must work closely together, because many decisions require the approval of several levels – and many services can only be provided together.

In order to carry out the tasks entrusted to them effectively, local authorities need sufficient financial resources. With fiscal decentralisation, an autonomous revenue and expenditure policy at the decentralised level is achieved by transferring taxation powers. At the same time, the financial resources of the federal states and municipalities should be geared to the tasks assigned to them and to the associated actual costs (‘connexity principle’).

The comparatively even distribution of wealth and quality of life in the Federal Republic of Germany shows the influence of the principle of solidarity and this is most clearly visible in the strongly-institutionalised fiscal equalisation of the states.

Germany has a highly differentiated and efficient decentralised system of government and administration, with its federal states, administrative districts, counties, towns and municipalities, the municipal associations and the municipal special-purpose associations that have emerged over the course of history. Today, this system shapes the political culture and civic awareness of the citizens. At the same time, it enables citizen-oriented politics, citizen-friendly administration and balanced economic development in all parts of the country as well as the preservation and maintenance of regional identities and particularities in a common state and community.

However, the decentralised system in Germany is not static. Even decades after the foundation of the Federal Republic of Germany, potential for improvement is still being identified and lively discussions are being held about implementation possibilities. The results of these discussions are implemented into reforms, and examples of this are the two federalism reforms in 2006 and 2009 , as well as the current reform of federal-state financial relations.

The idea of decentralisation is also expressed in Agenda 2030 for sustainable development, in particular by sustainable development goal (SDG) 11, “Making cities and settlements inclusive, safe, resilient and sustainable.” Local conditions and their global impacts can be most strongly influenced at municipal level. Due to their specific tasks in the area of services of general interest and their proximity to the citizens, they play a key role and are major players in the implementation of Agenda 2030 together with the federal and state governments. The Federal Government’s new sustainability strategy therefore expressly recognises municipalities as “central players and arenas of sustainable development.”

The GIZ has been supporting the introduction, consolidation and modernisation of decentralised government and administrative systems worldwide for over 25 years, on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ). The strengthening of citizen-friendly government and administrative systems has become a trademark of German reform support - and thus a key area of the reform advisory process “Made in Germany”.

The aim of the Governance Fund is to share the experience made in Germany in the field of decentralisation with the partner countries and to support them in their transformation to more decentralised management systems. The instruments of the Governance Fund are expert missions, study trips, dialogue formats and training and further education to promote knowledge transfer and exchange in the field of decentralisation.

Examples from the pilot countries


Priority: Fiscal decentralisation

1.  Dialogue and discussion mechanisms between the state levels to negotiate financial relations

2.  An inventory of mechanisms to ensure tax revenues at diverse levels of government.

3.  Models or methods for calculating costs resulting from the allocation of competences between levels of government.



Focus: decentralisation

  1. Qualification offers for employees of local government and tax administration
  2. Advisory and research services for the local government level
  3. Dialogue between local associations in Pakistan and Germany