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Local Government

Picture: Fotolia

Local government is responsible for implementing much of what is decided at the federal and state levels, for instance running schools and kindergartens. Additionally, in certain policy areas, such as the provision of cultural facilities, local councils can decide whether to take the initiative themselves.

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As a rule, several local government districts are combined to form a county. This level of government performs tasks which are beyond the scope of local administrations, such as managing the region’s public transport and refuse disposal. However, urban centres with a large enough population and sufficient administrative resources function as county boroughs, with their own county-level competences.

In recent years, rural regions and urban centres have developed very differently. Germans are increasingly finding themselves drawn to the country’s metropolises, while immigrants from abroad also mostly settle in the larger towns. While there is a growing housing shortage in the cities, in many villages houses are actually having to be demolished. The financial position of local administrations also varies widely. While some are almost free of debt, others are virtually paralysed by the burden of their borrowing. Raising charges and cutting services may bring short-term relief. In the medium term, however, such difficulties can only be solved by attracting new businesses and thus boosting tax revenues.

IW Consult, a subsidiary of the German Economic Institute (IW), monitors the development of German cities using such indicators as the rate of patent applications. The results of these annual analyses are published in its Städteranking (City Ranking).

Jürgen Matthes

Jürgen Matthes

Head of the Research Unit International Economics and Economic Outlook

Tel+49 221 4981-754


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