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Processes of european defragmentation as an inspirative tool for
policymaking
PhDr. Mgr. Tomáš Váňa, M. A.1
Abstract
This paper looks at the different stages of European municipal defragmentation and at the
diverse models that post-war countries adopted for their municipal structures. It notes that
defragmentation was undertaken with little previous knowledge regarding the possible impacts of
these approaches. Through applying the QCA method of analysis it looks at common and
distinct features of these approaches and draws a sharp dichotomy between defragmentation
trends in post-communist countries and countries of the Western bloc. By showing that there are
trends immanent to post-communist political systems, this paper presents the idea that these
systems can learn from errors made by the initially defragmenting countries. Drawing on the
example of the late-defragmenting Iceland, this paper shows how the currently or prospectively
defragmenting countries can learn from its experience. In the last part of this paper suggestions
are made how the Czech Republic can learn from this experience, particularly from democratic
referendums, legislative and economic incentives and municipal cooperation.
Keywords
Defragmentation, Iceland, municipality, autonomy
1. Introduction
Defragmentation processes observable in Europe since the mid-20th century were a natural
consequence of efforts to rebuild the war-torn continent and to improve the performance of
government at the municipal level. The processes of modernization and technological innovation,
increase in the complexity of the agenda of local governments, deepening social state (particularly
in Scandinavia) in accordance with the Beveridge concept of welfare state (Beveridge 1942), the
pursuit of economic efficiency and the successful implementation of state role at the local level
were all reasons why we can in many countries of postwar Europe observe processes of
1 The author is a Ph.D. candidate at UK FSV IPS (U Kříže 8/661, Praha 5 – Jinonice). He can be reached at [email protected].
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increasing inter-municipal cooperation, which often developed into gradual merging of
municipalities and the defragmentation of municipal structures (Baldersheim, Stahlberg c1994:
10).
This text deals with selected aspects of European municipal defragmentation. Through the QCA
method it analyzes selected European countries and points to the fact that municipal
defragmentation is interesting not only in terms of its legislative, economic or identity angle, but
also through its time aspect. Based primarily on temporal variables, a period when a country
defragmented its municipal structure, this text differentiates a) countries where defragmentation
took place in the initial period, b) countries in which defragmentation took place in relatively
recent times, c) countries where defragmentation took place both in the second half of the 20th
century, and in relatively recent times, d) countries in which defragmentation has not occurred, e)
post-communist countries that have gone through the defragmentation process during the period
of communism and during the transition to democracy have undergone a reverse process of re-
fragmentation and f ) post-communist countries that have gone through the the defragmentation
process during their communist period and during the transition to democracy have undergone a
continuing defragmentation process or have restarted it and therefore no reverse action took
place. The text also deals with the fundamental problems of countries that have undergone
defragmentation in the first half of the 20th century, and points out consequences of this
defragmenting, as well as to the fact that countries that defragmented relatively recently have
towards these countries a comparative advantage, as they can learn from their mistakes. The text
works with two countries of this kind, namely Iceland and Germany. It further discusses the case
of Iceland, points to positive aspects of its defragmentation process and notes the successful
defragmentation. The final part of the text is devoted to those aspects of the successful Icelandic
defragmentation, which can be inspiring. Specifically Czech Republic is pointed out. The text
thus aims to summarize the problems of European municipal defragmentation, refers to the time
frame aspect of it, recognizes positive defragmentation mechanisms and on the basis of an
examination of the Icelandic case suggests an introduction of several of its aspects in the Czech
Republic.
2. Trends of European Defragmentation
The wave of European municipal defragmenting was not uniform in time or spatial terms. In
Scandinavia there have been mergers of municipalities from 50’s to 90’s of the 20th century,
while in the Midwestern states of Europe, especially the Netherlands and Germany, the merge
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occurred only from the 60’s and 70’s of the 20th century. Iceland is a unique example of late
defragmentation at the beginning of the third millennium.
In terms of defragmentation trends in the countries of the Western Block it is a challenging
research direction to examine the opposite process, which occurred in the Eastern bloc, where
after its collapse a mild (Yugoslavia, Poland) or considerably more pronounced fragmentation
(Hungary, Czech Republic, Slovakia) took place (Jüptner 2010). Divergent trends in
fragmentation can be largely attributed to differences in economic and social trends that have
occurred in Europe after the Second World War. While in the Western bloc defragmentation
took place as a result of a paradigmatic change in perception, when the fragmented municipal
structure was re-evaluated as economically inefficient, but at the same time sociological aspects of
merging municipalities were taken into account, in the Eastern bloc defragmentation was the
result of totalitarian ideologies’ neglect to social consequences of defragmentation, which led to
lack of ownership of these processes and their fall into re-fragmentation. It turned out that even
though it is economically favorable to defragment municipal structures, omitting the sociological
aspects of these processes, especially the identification of the local population with the
municipality, the influence of the traditional structures and family ties, local elites and identities
and cultural variables, leads to mismanagement of the defragmentation process and reverse
trends observable in the later period (Klimovsk 2010).
In accordance with the aforesaid it is crucial that the emphasis on identity, cultural, historical and
social variability is adequately emphasized in today’s Europe (especially in the structures of the
European Union). The trend toward standardization, unification and uniformity were the result
of lessons learned from development in the Eastern Bloc, and were abandoned in their form.
Now a comprehensive and harmonious development of regions is supported, in accordance with
particular needs of its inhabitants, which, inter alia, is enshrined in the Torremolino and Aalborg
Charter (Torremolino Charter 1983, Aalborg Charter 1984).
Internationally-referenced antagonisms, geographic distance, cultural differences, social
differences, and many other factors contribute to the fact that there can be no single model of
fragmentation of municipal structures. While many countries of Western Europe went through
defragmention, among them can be found those in which this trend was manifested or expressed
only to a minimal extent. Among these is especially France, but also Switzerland, countries of
southern Europe, Italy and Spain, and countries of Central Europe - Czech Republic, Austria and
Hungary. In contrast, countries of Western Europe, which significantly defragmented were
Belgium, Germany and the United Kingdom, as well as Greece and especially the Scandinavian
countries (Decentralization and local democracy, 2008: 133).
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A very specific group of countries went the opposite way after overcoming the bipolar division of
the world. That was a a result of violent defragmentation at a time when they were ruled by
authoritarian or totalitarian regimes. With the transition to democracy, contrary to trends in
Western Europe, these embarked on a re-fragmentation of their municipal structures. This
remarkable process is primarily attributed to the restoration of democratic processes in these
countries, which resulted in a re-allocation of a number of municipalities. In the previous period
of consolidation merges were undertaken without consent of the local people and local elites
(Majerová 2008), (Decentralization and local democracy, 2008: 129).
While Western Europe places more emphasis on intermunicipal cooperation to remedy a
previous radical amalgamation of municipalities, countries of the former Eastern Bloc, with
problems arising from undemocratic defragmentation, addresses the possibility of re-
fragmentation, and this option is used by municipalities (Decentralization and local democracy,
2008: 135).
A completely different category consists of those political systems that underwent the
defragmentation process in recent decades, which can also be seen as a consequence of a
fundamental dichotomy in policies relating to local government, which in the second half of the
20th century showed the emergence of two primary trends. The British model perceived
government as a provider of public services and subsequently rationalized its operations so as to
optimize the provision of these services (eg Sweden, Denmark, Finland, Great Britain). The
French model (eg Italy, France, Spain), however, perceived the government as a body built for
the local community in terms of Tönnies’ Gemeinschaft (Tönnies 1955). This is manifested in
France’s strongly fragmented municipal structure, the high number of municipalities and their
low populations (40% of all municipalities of the European Unionare located in France (CEMR,
2008: 5)). With this, the specifics of local communities can be taken into account. Countries that
have adopted the French model in a large majority adopted the rationalization approach to spatial
arrangement and have fundamentaly restructured their local governments, or directly
defragmentated their municipal structures.
Since the end of the 20th century, especially since the 90’s, it is clear that in particular the
economic challenges facing municipalities and states face, imply the need for the adoption of
territorial reforms (Hovgaard, Eythórsson, Fellman 2004). Excessive fragmentation is generally
perceived as a negative element, suitable for political-administrative organization of the country.
Therefore extensive consolidation reforms have been carried out to stop the growing
fragmentation of communities and reverse the generally negative perception of the trend in the
opposite direction. A clear consensus about the benefits and drawbacks of fragmentation of
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municipalities, however, was never adopted. For although defragmentation is undoubtedly
advantageous from an economic point of view, which especially in the post-war period played a
significant role, sociological opinions do not supply clear answers. Rather the opposite. There is a
strong view that advocates the idea that there is a strong identification of people with their
municipilaities, which argues in favor of maintaining a fragmented municipal structure
(Klimovský 2009: 183).
Small municipalities and communities and a fragmented system provide a number of positive and
negative aspects. As a positive feature it is necessary to perceive the relative proximity of the
population to the local government, direct communication with it, implicit control of public
authorities, the potential solutions to the subsidiary and any other benefits from the close
relationship between the representatives of the authority of government and the population. On
the other hand, the proximity of such individual actors can lead to the formation of degenerative
elements, such as clientelism, nepotism and corruption. Too close merging can sometimes be so
close that it becomes difficult to break away from personal ties and interests. The disadvantages
are also limited resources to provide services compared with those provided by larger
municipalities. In small municipalities it can also prove difficult to carry out specific functions
assigned to the central government, although such problems are usually solved by creating inter-
municipal cooperation or association of municipalities (Local Governments 2012). Therefore,
fragmentation is perceived as a problem worthy of solution (Klimovský 2009: 183), which is
accepted by most European countries. Consolidation trends are therefore presently advocated
(Klimovský 2009: 188).
One of the main challenges in this regard is the increasing trend of urbanization. Half the world's
population now lives in cities and the estimate for the next three decades provides that
urbanization and the amount of people living in cities will continue to grow. This is a radical
change in the current trend, because in the last third of the 20th century, the ratio of increase of
population between rural and urban areas was much more balanced (Cohen 2006).
3. Diversity of Defragmentation of European municipalities
Defragmentation process has the primary objective of minimizing economic disadvantage arising
from the fact that municipalities must provide a range of services, the cost of the performance by
defragmenting, by dividing larger units (Provazníková 2009: 15, Johannesson, 2007: 163,
Hovgaard, Eythórsson, Fellman, 2004: 33nn). The adoption of the 1999 Act in France set the
trend of cooperation between municipalities, which had as its aim minimization of economic
disadvantages, further deepening of financial support, which meant the development of inter-
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municipal cooperation and the creation of inter-public corporations with tax powers that go
beyond the powers of individual municipalities. At the beginning of 2007 there were more than
33,000 French municipalities involving almost 55 million people associated in 2588
intermunicipalities. Similar trends took place in Hungary, Italy and Spain. (Decentralization and
local democracy, 2008: 136).
The above trend, however, is a matter of the past fifteen years, while major defragmentation
processes took place on the European continent since the 50’s, when Austria reduced its number
of municipalities by half and Sweden by eight. This trend was subsequently been adopted by
Denmark, which in the early 70’s began to reduce its communities to one-fifth (in 2007 a further
reform was passed, which reduced the number of municipalities from 271 to 98 (CEMR, 2008:
9)), then West Germany in the 60’s and 70’s to one third, Belgium in 1975 to one fourth, the
Netherlands (where the defragmentation process took a full half of the 20th century) by half, and
Finland, which underwent an unsuccessful municipal reform in the late 60’s and 70’s, and in 2009
was able to reduce the number of municipalities by 67 (CEMR, 2008: 5). It successfully
introduced a new model combining two, three, or more municipalities into one (CEMR, 2008:
20). Later they began the process of defragmentation in Lithuania (1994), which reduced the
number of municipalities to a tenth, and in Greece (1997), where it was reduced to one-sixth.
Since 1998 attempts began to defragment Latvia, whose stated objective was to reduce the
number of municipalities to a fifth.
A similar defragmentation trend took place in the second half of the 20th century in the Eastern
bloc, but in a completely different way with a completely different motivation and different long-
term consequences than in democratic countries. These defragmentations in their generality took
place against the wishes of local residents, without respecting local specificities, and their goal was
to centralize municipal structures and functions performed, resulting from the ideology of the
regimes and efforts to control. This defragmentation after a transition of these regimes to
democracy led to a reverse trend of re-fragmentation. Restoring historic communities in their
historical extent was perceived as a democratic trend reintroducing the right of the people to
determine their own volition. In the Czech Republic since 1989 more than two thousand villages
were renewed, and in Slovenia the number of settlements increased in 2006 to 210, while in 1976
there were only 54 (CEMR, 2008: 5-6). A typical example of the development of post-communist
countries in the municipal structure took place in Hungary, which since the 70’s forcefully
merged municipalities, achieving a reduction in the number of municipalities from 3 021 to 1 364.
Reform Acts in 1990 and 1994 admitted every village a constitutional right to self-government,
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which led to a re-fragmentation and increase in the number of communities by than three
thousand (3,071 in 1990, 3,131 in 1999) (Fekete 2002 Pfeil 2010).
4. European defragmentation trends analysis and their explication
The diversity of approaches to European countries defragmentation of municipal structures, the
effects of the division of Europe into bipolar blocks that have evolved in different ways, different
trends after overcoming bipolar division, geographical, cultural and social diversity, and many
other aspects make the effort to generalize trends in defragmentation difficult. In one of the
possible typologies Sharp points to Northern European countries, where the average number of
municipalities decreased by 41%, and the South, where there were a small number of local
government reform and the average decreased by 5%. This typology, however, is already
problematic for the reason that, for example in Italy and Portugal, by contrast, the number of
municipalities increased (Bogason 1996). North-south divide defragmentation is too simplistic
and does not contain a post-communism variable. In the interest of a more comprehensive,
though not necessarily generalizing, examination of the underlying trends in defragmentation on
the European continent an analysis using the QCA method (Qualitative Comparative Analysis),
aimed at the inclusion of variables in the post-communist development, is used. The primary
criterion of this typology is the period in which the defragmentation process took place (as is
apparent from the table of encoded data (see Tab. 1)). The applied method allows through
qualitative analysis to discern common elements in the observed phenomena and thus recognize
the accompanying elements in the monitored cases. Its aim is therefore to examine countries on
the basis of selected elements, based on time criteria during defragmentation of municipal
structures and to create a typology of defragmenting countries.
For investigating the conditions used for this analysis were chosen defragmentation before 1989
(dante89), defragmentation after 1989 (dpost89) of the country in the post-communist country
group (postcom) a reverse trend in defragmentation after the transition to democracy
(reverzpostcom). As the table of encoded data shows, the initial analysis was complemented by
another condition, belonging to the Baltic countries. This condition was added as a result of the
initial inconsistency of the results and its aftermath was the hypothesis that post-communist
countries go through a re-fragmentation, extended by the finding that in this set the Baltic
countries form a separate group, where re-fragmentation of the transition to democracy did not
take place and thus the process typical for these countries does not fall into a set of post-
communist. The analysis has provided an interesting secondary conclusion on this set of
countries (see Table 1).
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The research sample of countries selected for analysis was chosen on the basis of available data
and the representativeness of the countries, in the interest of validity of the conclusions and
coverage of trends and opportunities that examine the presented question. The analysis include
post-communist countries, countries that have adopted the British and French model of
municipal structures, countries geographically within the Northern, Southern, Western, Eastern
and Central Europe, countries that defragmented in several stages, at the same time or underwent
the defragmentation process. I also included countries that have undergone a reverse process
after the transition to democracy, as well as those that have undergone this process, and where a
vice versa trend adopted during the communist regime further deepened.
Tab. 1
Table of coded data
caseid dante89 dpost89 Postcom Reverzpostcom baltic
AUS 1 0 0 0 0
BEL 1 0 0 0 0
CS 1 0 1 1 0
DAN 1 0 0 0 0
EST 1 1 1 0 1
FIN 1 0 0 0 0
FRA 0 0 0 0 0
GER 0 1 0 0 0
GRE 1 1 0 0 0
HOL 1 1 0 0 0
HUN 1 0 1 1 0
ICE 0 1 0 0 0
9
ITA 0 0 0 0 0
LAT 1 1 1 0 1
LIT 1 1 1 0 1
NOR 1 0 0 0 0
POL 1 0 1 1 0
SLO 1 0 1 1 0
SPA 0 0 0 0 0
SWE 1 0 0 0 0
SWI 0 0 0 0 0
UK 1 0 0 0 0
YUG 1 0 1 1 0
Source: Author
Explanation:
baltic: valtic country
dante89: defragmentation before 1989
dpost89: defragmentation after 1989
postcom: postcommunist country
reverzpostcom: reverse trend (de)fragmentation after transition to democracy
The coded data was analysed through the crisp set analysis, where a truth table was created
that divided the analyzed cases into six sets, which cover 100% of the cases examined with full
consistency. Of the six sets two sets of cases were coded as countries belonging to the superset of
post-communist countries (see Table 2).
Tab. 2
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Truth table
reverzpostcom baltic dpost89 dante89 number postcom raw cons. PRI cons. SYM cons.
0 0 0 1 7 0 0.000000 0.000000
1 0 0 1 5 1 1.000000 1.000000 1.000000
0 0 0 0 4 0 0.000000 0.000000
0 1 1 1 3 1 1.000000 1.000000 1.000000
0 0 1 0 2 0 0.000000 0.000000
0 0 1 1 2 0 0.000000 0.000000
Source: Author
Annex 1
Results of QCA analysis
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Source: Author
As the truth table (Table 2) and a graphical display (Appendix 1) show, there is a clear link
between membership in post-communist countries and the way defragmentation took place.
Among the post-communist countries and defragmentation tendencies, there are two dominant
trends that the analysis proved to be bound by geographic considerations. One group consists of
post-communist countries that have underwent the defragmentation process during the period of
communism and after the transition to democracy underwent a reverse proces of re-
fragmentation. These include Czechoslovakia and its successor states Czech Republic and
Slovakia, Hungary, Poland, Yugoslavia and Slovenia. The second group consists of post-
communist countries that have gone through the defragmentation process during the communist
period, and after the transition to democracy have undergone a continuing or restarting of the
defragmentation process. These countries are distinguished by one characteristic, namely
geographic location (and other aspects related thereto), as it is the Baltic states of Lithuania,
Latvia and Estonia.
The results of the analysis when selecting an intermediate solution, which was evaluated as
the best one, show a pair of solutions that confirm previous solutions (see Table 3).
Tab. 3
Analysis of truth table: Intermediate solution
Hrubé pokrytí Jedinečné pokrytí Konzistence
dante89*~dpost89*~baltic*reverzpostcom 0,625000 0,625000 1,000000
dante89*dpost89*baltic*~reverzpostcom 0,375000 0,375000 1,000000
Solution coverage: 1,000000
Solution consistency: 1,000000
Source: Author
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The countries belonging to term dante89 dpost89 * ~ * ~ * baltic reverzpostcom include:
CS (1.1), HUN (1.1), POL (1.1), SLO (1.1), YUG (1.1). The countries belonging to term: dante89
* dpost89 * ~ * baltic reverzpostcom include EST (1.1), LAT (1.1), LIT (1.1).
5. Typology of European municipal defragmentation and predictive
implication for the case of Czech Republic
The results of the analysis showed one major factor which I will devote the next section to.
The highest number in the sample represents a group of countries in which defragmentation took
palce in the initial period, as shown in the current text, with the negative consequences of this
defragmentation. The second largest group is the group of countries of post-communist
countries, including the Czech Republic, where there has been a reverse trend. Both groups
underwent in the given period an essentially similar defragmentation process, differantiating only
by jurisdiction to bipolar blocks. Another group is the group of countries where defragmentation
has taken place, followed by the group of the Baltic States, as well as a group of countries where
the defragmentation took place in the second half of the 20th century, and even in relatively
recent times. Finally, the last group of countries consists of pairs, where defragmentation took
place relatively recently, and it is this group of countries, therefore, which provides relevant data
allowing observations to optimize defragmentation processes. This pair, namely Iceland and
Germany benefited due to late defragmenting from the experiences of countries where
defragmentation took place earlier.
We can conclude that in countries with a British model too radical defragmentation is now
being solved through institutional renewal. In countries with a French model defragmentation
has not occurred, but inter-municipal cooperation was strengthened. In post-communist
countries fragmentation is a result of previous undemocratic and artificial defragmentation. Baltic
states are a separate group because as they are postcommunist but also defragmented their
municipal structures.
For the Czech Republic the presented evidence indicates that it is likely that as a result of
economic necessity it will defragment its municipal structure. This process will take place in the
presence of the defragmentation process experience in other countries, and will be able to avoid
the mistakes of initially defragmenting countries, which then had to partially reverse the process,
and from countries (France), which introduced inter-municipal cooperation. In particular, it will
be able to inspire itself by examples of countries that have started to defragment recently and
have been successful in this process (Iceland, Germany).
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In terms of typology defragmentation therefore the case of Icelandic defragmentation offers
a unique and insightful comparative perspective, not only for the Czech Republic, but for all the
states belonging to the category of post-communist states, which re-fragmented their municipal
structure, or have undergone a process of defragmentation. Like in the Netherlands
defragmentation occurred in Iceland, but the process took its highest intensity in comparison
with other defragmenting countries very late, in the 90‘s of the 20th century. Moreover, this is an
example of a country where defragmentation has reached an unusually large scale - for the last
half-century, the number of settlements on this island state fell by more than a half (Local
Governments 2012), which in the context of low population and relatively low number of
communities provides a unique opportunity for creating a case study. In will thus devote the
following text to consolidation processes that took place in Iceland in the second half of the 20th
century, and I'll demonstrate some fundamental and generalizable trends in defragmentation.
Through a case study, illustrating one of the defragmentation processes, I will carry out a
description of the Icelandic defragmentation.
The illustrative study of Iceland was selected, and Island itself as an example the optimum
defragmentation of municipal structures for two primary reasons. Firstly, Iceland‘s
defragmentation can be described as successful, because it was undertaken with the consensus of
the population (Hovgaard, Eythórsson, Fellman, 2004: 23). This is in contrast to the communist
Czechoslovakia and other Eastern Bloc countries, where before 1989 defragmentation took place
on illegitimate grounds. Iceland defragmentation was based on local referendums, voluntarily,
had a positive motivational impact on the establishment of inter-municipal cooperation and
brought financial savings due to the diversification of the financial costs of public administration.
The second reason for choosing Iceland was that together with Germany, as shown by the QCA
analysis, it defragmented in terms of time later than other European countries, which allowed
Iceland to benefit from the experience of countries where defragmentation took palce earlier.
6. The Icelandic settlement
Island is very specific in terms of examining the fragmentation of its municipalities. It is
situated on 103,000 square kilometers, while the bulk of the population lives on the coast, of
which 62 per cent in the Capital Region Reykjavík. Only about 25 municipalities have a
population of over 1,000 inhabitants, the largest of which, outside of Reykjavík, Akureyri has
15,000 inhabitants (Jonsson 2002:22). With 313,000 inhabitants and 2.9 inhabitants per km2 it
belongs among the most sparsely populated countries in Europe (Iceland 2010). In terms of
exploring the fragmentation of communities and the subsequent process of defragmentation it
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provides a unique research facility thanks to its sparsity. Especially since the 90‘s of the 20th
century ongoing processes in Iceland can be considered interesting in terms of local politics. As a
result of central government policy in recent decades the number of municipalities declined,
while their size and degree of urbanization increased.
Beginnings of the first settlement in Iceland can be tracked to 874 (Vilhjalmsson 2005),
when the first inhabitants of this second largest European island (Iceland 2010) became the
Norwegians and Celts. In 930 the first central judicial and legislative assembly Althing was
created and the whole country adopted a uniform Code (Reynarsson 1999). Written history
records say that the creation of local government begins to form around the beginning of the
10th century, shortly after the settlement of Iceland (Jonsson, 2002: 3). In this context the Grágás
old law books are a valuable source of relevant data and information, dating from the 12th
century (Jüptner, Polinec, Shoemaker, 2007: 56), which contain several references to local
governance, structure, power and responsibility.
In 1262 Island created a Union with the Kingdom of Norway. After this Nordic monarchy
came under the rule of Denmark in 1380, Iceland became a Danish dominion (Jonsson, 2002: 3).
Already in conjunction with the Norwegian monarchy the independence of Icelandic
municipalities began to be suppressed (Jüptner, Polinec, Shoemaker, 2007: 56) so much that at
the beginning of the 19th century it has been virtually impossible to talk about its existence. Up
to the Royal Decree of the Local Government Act of May 4, 1872 when local governments were
reestablished. They were created on the basis of ancient communes, unlike England and
Scandinavia, which followed parish arrangements. This limited autonomy was further expanded
in 1904 (Jonsson, 2002: 3) and a year later the first law on local self-government was adopted
(Jüptner, Polinec, Shoemaker, 2007: 56).
With the end of World War I in 1918 Iceland became an independent state in the king's
union with Denmark. It gained full independence in 1944, when its union with Denmark was
abolished and it became a sovereign Republic (Jonsson, 2002: 3).
a. Defragmentation
In the 90‘s of the 20th century (Kersting, 2003: 36) municipal organization more or less
corresponded to that of the Danish King Christian IX. of 1872. The country was divided into
172 municipalities. At the beginning of the 20th century the number of municipalities began to
increase, as in many parts of the country urban areas began to become independent. The number
of municipalities has reached its maximum extent in 1950 - 229 (Local Governments 2012). This
trend of increasing number of municipalities took the opposite direction in the mid-20th century.
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In 1990 in mutual cooperation the Ministry of Social Affairs and the Association of Local
Authorities launched a campaign for merging of municipalities (Local Governments 2012). At
that time Island had 204 municipalities of which 30 had a city status and the remaining 174 were
districts. In 1994 there were already 171 number of municipalities, which meant the loss of 33
municipalities in comparison with the previous period. The declining trend continued so that in
1998 the total number of municipalities was 124 and four years later 105 (The Association of
Local Authorities in Iceland 2012).
The Ministry of Social Affairs and the Association of Local Authorities due to the success of
the campaign launched a similar event again in 2005. Inhabitants of each municipality were
allowed to choose whether they wish to merge their municipality with another. How successful
this campaign was can be evidenced by the fact that in 2006 Iceland had only 79 municipalities
(Local Governments 2012).
These campaigns, which have broad implications for local governance, were the result of
changes that have taken place in recent decades, and not only on the European continent. While
hundreds of years before borders were drawn by local authorities around farm districts, in
modern times these have proved to be unsatisfactory, especially because they were too small to
serve as local business units. More drastic changes were observed in transport and
communication. There was also a large migration of population from rural to urban areas. The
trend of urbanization has led to changes in the economy, when agriculture lost its primary
importance in favor of fishery, manufacturing and service industries. These became the dominant
economic areas (Jonsson, 2002: 8).
b. Transfer of powers
There are two levels of government in Iceland - central and local municipalities
(Johannesson 2007). In parallel with the process of defragmentation the reform of local
government, i.e. the transfer of services and functions between the two levels of government
(central and local) took place. At the same time a reform in the financing of local governments
took place, as well as municipal relations between the center and the periphery. Further changes
occurred in administrative procedures and in other sub-regions. The main objective of these steps
was the creation of local structures capable of efficiently fulfilling a variety of local services,
developing local democracy and strengthening local self-government (Jonsson, 2002: 8).
Today, municipalities are responsible for a wide range of areas (Bogason, 1996: 8). In
particular, fire protection, voter registration, preschool education, kindergarten and nurseries,
family welfare, residential social care, housing, urban planning, regional and spatial planning,
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water and sanitation and waste collection, cemeteries and crematoria, slaughterhouses,
conservation, museum and libraries, parks and open spaces, sport and leisure, transport and ports
(Structure and Operation, 2005: 17-19).
Perhaps the most important areas of competence of local authorities are the responsibility
for the maintenance of primary and lower secondary education, which was transferred to the
local government in 1996. Due to this step the local income tax was correspondingly increased
(Jonsson, 2002: 8).
c. Legislature
The holder of sovereign power in Iceland is the Parliament, which is named Althing. Local
administration derives its power from it. Iceland's constitution does not allow a change in the
autonomy of local governments without constitutional amendments. But it also anticipates that
the performance of local governments is subject to legal restrictions and is carried out under the
supervision of the central government (Johannesson 2007). The Parliament is entitled to make
any changes in the powers of municipalities, especially those that it deems necessary for the
fulfillment of Iceland's international obligations. The autonomy of local governments is
confirmed by the European Charter of Local Self-Government, which was created under the
auspices of the Council of Europe and Iceland signed it on November 20, 1985 (Structure and
Operation, 2005: 5).
Local government is under Article 78 of the Constitution entitled to power to decide its own
affairs under the provisions of the Act (Jonsson, 2002: 5). The scope of these matters extends to
the degree to which they are governed by other regulations (Structure and Operation, 2005: 15).
However, although the laws are created in the Althing, and many policies are determined by the
central government, local governments have the freedom to adapt it to their local conditions. The
main legislative framework for local government is defined in the document Local Government
Act No 45 of 1998 (Jonsson, 2002: 5).
According to Article 68 of the Local Government Act, the central government through the
appropriate ministries must work to increase the size of municipalities through mergers of
municipalities with a small population in larger and more efficient units. This is to be carried out
in cooperation with various municipalities, local government associations and regional federations
of municipalities.
Merging communities is only possible by law under Article 3 of the Local Government Act.
This power also belongs to the Ministry responsible for local government. Municipalities also
17
have the power to initiate the merger process and since the 90‘s of the 20th century, this right is
used significantly (Structure and Operation, 2005: 6).
If two or more municipalities intend to merge, they elect a committee to examine the
possibility of merging. Once the Commission gives its opinion on the merger option, local
governments put the matter on their agenda. The topic is discussed twice without a vote. After
discussions of local authorities a local referendum on the merger is undertaken. The time of the
referendum, which must be the same for all participating municipalities is determined by local
authorities. Article 91 of the Local Government Act provides that municipalities may join only if
this is agreed by the majority of voters in each municipality. If the merger is approved, local
governments agree on financial issues arising from the merger of municipalities, the number of
representatives needed for the creation of new local government, the name of the municipality
and other relevant issues. The decision is then sent to the Ministry, which decides on the merger.
Once the merger of municipalities takes place, it can be reversed only through legislation
(Structure and Operation, 2005: 7).
d. The existence and function of municipalities
Article 6, Section 1 of the Local Government Act provides that the minimum number of
inhabitants is fifty. Section 2 provides that if the population falls below fifty in three consecutive
years, the Department must take steps to merge these municipalities with neighboring
municipalities. Under such conditions a smaller municipality may be divided between several
adjacent municipalities. According to section 3 exceptions are admitted if such a step would in
the opinion of the Ministry prevent the inhabitants of a small municipality in establishing a
coherent relationship with the inhabitants of neighboring municipalities.
All municipalities have a similar basic structure and duties under the law (Bogason, 1996:
174). Keeping up to these obligations however depends on the size and population of each
municipality. Small municipalities are often forced to cooperate or enter into a contract for
services with neighboring municipalities to allow their residents to provide certain services
(Structure and Operation, 2005: 7).
It is obvious that many municipalities are too small to meet their obligations. Basic functions
are twofold, namely a democratic administration. The first allows members of local communities
to participate in local affairs, and the other allows to apply policies to promote local specificities
(Jonsson, 2002: 5).
18
Awareness of the problem of fragmentation of municipalities and the resulting inability of
municipalities to fulfill some of its obligations moved the Minister of Social Affairs in August
2003 to form an operating group. It was tasked to coordinate a joint initiative of the Government
and Local Government Association to strengthen local governments. A sub-committee put
forward proposals for reducing the number of municipalities. In March 2005, the sub-committee
presented its conclusions, which stated that by 2006 the number of local authorities could be
reduced to 46. On the basis of this estimate on October 8, 2005 every municipality held a
referendum on the issue. Most of the population in most communities however disagreed with
suggestions of the sub-committee. In 41 municipalities residents voted against the merger. In 20
they agreed. Only one proposal was adopted by a majority of voters in all municipalities involved.
In November 2004 and April 2005 three other proposals for amalgamation were approved in
a referendum (Structure and Operation, 2005: 33).
e. Current fragmentation of municipalities
Today Iceland has 79 municipalities (The Association of Local Authorities in Iceland 2012),
firmly defined by geographical boundaries. The largest and the capital is Reykjavík. Other major
towns are Kópavogur, Hafnarfjörður and Akureyri (Jonsson, 2002: 6). In addition to Reykjavik,
whose population today is 115,000 inhabitants (38 percent of the total population in the country),
only four cities exceed 10,000 inhabitants, and another four exceed 5000 inhabitants (Local
Governments 2012).
In contrast, approximately 35 municipalities have fewer than 200 inhabitants (Jonsson, 2002:
6). The smallest Icelandic municipalities Árneshreppur, which has only 48 inhabitants (Klimovsk
2009: 184). Thus it does not meet the requirement that fifty inhabitants necessary for the
existence of the municipality.
Intermunicipal cooperation is extensively developed in Iceland both in the provision of
various services, such as education, for example through the creation of co-owned agencies, both
on a voluntary basis in various projects (Structure and Operation, 2005: 23). This allows, among
other things, saving funds. This is a crucial issue because the share of local governments on
public spending has in recent decades grown in a considerable speed, from 22.9% in 1991 to
33.3% in 2001.
In comparison with other Nordic countries, the proportion of local authorities in public
expenditure is relatively small, since a number of costly expenditures is covered by the central
government. A greater role of the central government in Iceland in this area is attributed to the
size and fragmented spatial distribution of the population (Structure and Operation, 2005: 22).
19
7. Municipalities in the Czech Republic and a potential inspiration by the
Icelandic Defragmentation
In the previous part of this article I presented from a historical, legislative and administrative
aspect the situation of municipalities in Iceland and its method of defragmentation. Because this
defragmentation was successful (because it achieved a drastic reduction in the number of
municipalities with the simultaneous consensus of the population) and took place in the period,
which allowed defragmenting countries to take lessons from the mistakes of earlier
defragmenting countries, Iceland's example can serve as an inspirational tool for similar steps in
the CR Czech Republic, which seem to be necessary from an economical perspective. However,
it is necessary to point out that the Czech Republic should not necessarily be inspired by steps
that are largely non-transferable and distinct for every single political system, but rather by
general trends in defragmentation, for example the establishment of inter-municipal cooperation,
a legislative basis for the economic benefits of defragmentation, or democratic consolidation path
of a referendum instead of centrally established mergers, etc. In this final section I will therefore
first outline the basic structure of municipalities in the Czech Republic on the basis of
comparison with the Icelandic reality and point out possible inspirational ways in defragmenting.
Public Administration in the Czech Republic is divided into state and local governments.
Municipalities as the basic territorial authorities carry out in accordance with the principle of
subsidiarity self-governance, and higher administrative authorities intervene only if this is
required. Deconcentration of government that led to the legal custody of the performance of the
state administration to municipalities on the basis of delegated powers has also been carried out
in accordance with the principle of subsidiarity and the effort to bring governance closer to the
citizens. This mixed model of public administration in the Czech Republic was applied on the
basis of changes after November 1989, when it was decided that a public administration reform
will be based on the pre-war principles, rather than on the mechanism of national committees,
which were set during the communist regime. Therefore in July 1990 a constitutional change took
place and separated state and local governments and municipalities. Later the Municipalities Act
was adopted.
The Czech Republic struggled throughout the first decade after the fall of the communist
regime. Only in relation with the application of the Czech Republic to join the EU a
comprehensive strategy for public administration reform in the Czech Republic was approved in
1999, mainly through the Phare project "Improvement of Public Administration in the Czech
Republic - the first phase". The process of decentralization and deconcentration subsequently led
20
after more than four decades to the abolishment of district offices on the last day of 2002.
Following their cancellation and the need to address the performance of their existing
competencies municipalities with extended powers have been established, since a number of
existing competencies could not be carried out anymore by district offices (due to their size).
Therefore, on the basis of geographic and population (15,000 inhabitants) criteria 205
municipalities of this new type were determined (MoI 2005). Some partial powers nonetheless
were not transferred to the regional level. This reform, however, has failed to fulfill its full
purpose of the new organization and self-management for it only increased bureaucracy by at
least 10%, beause it actually put into place a three-step model of self-government, which proved
to be unnecessarily complex and administratively demanding (Kadečka, 2003: 23).
The three-stage model of self-government brought with it a deficit of responsibility – it
allowed municipalities to argue that they do not have sufficient economic, expertise and human
resources and public administration, on the contrary, that due to the transmission it lost its
necessary competencies. Small communities also often ahd limited possibility to take advantage
of economics of scale. The law on the budgetary allocation of tax revenue from June 2000 was to
enable municipalities to some extent to deal with these economic difficulties, as it favored bigger
municipalities, and potentially could have lead to merging of municipalities. But since its adoption
only a few dozen municipalities merged.
The second fundamental options which municipalities in the Czech Republic have to
optimize their economic systems and reduce their financial expenses, is establishing cooperation
with other municipalities and distribute the financial burden. The municipalities can work either
on a bilateral or multilateral level, the micro level, and they even have the Union of
Municipalities, which facilitates cooperation with foreign communities. Yet this plurality of
possibilities for cooperation is not used very often, although municipalities may jointly establish
legal entities or conclude agreements among themselves regarding the performance of certain
administrative acts. The probůem is that these associations of municipalities don‘t benefit from
the income tax and therefore lack the motivation to merging. One of the reasons is that the
potential tax revenue would have to be given to municipalities, which would undoubtedly
encounter resistance. Therefore associations of municipalities cooperate much less than is
possible, and in particular are reluctant to participate in costly projects (which could bring
significant financial savings).
If we look at some elements of the Icelandic defragmentation, we must conclude that many
of its aspects could have a positive impact on the Czech municipal structure. The underlying idea
is to use the experience of New Public Management, which was applied in Iceland (Manning,
21
2001: 299). Also a similar campaign for merging municipalities, which was launched in Iceland in
1990 (Local Governments 2012), could be launched. Such a campaign could draw attention to
the fact that the current municipal structure, based on Bach and pre-war districts, does not
comply with current needs.
A transfer services of between the state and the local structure can again serve as an
inspiration. While Iceland was created by defragmenting local structures capable of effectively
meeting the legal services, in the Czech Republic this process did not have success. The current
regional structure that de facto introduced (together with other reforms already mentioned) the
three / five-point division (state, county, municipality with extended powers, municipalities with
delegated authority, municipalities) is unnecessarily complicated and economically and
administratively burdensome. This is evidenced by the fact that the EU needed to introduce
NUTS II regions, which basically confirm the incorrect division into fourteen regions. For the
Czech Republic the two-stage setting of Iceland can be inspiring.
As was already mentioned, in connection with the transfer of responsibility for primary and
lower secondary education to self-government in 1996, the Icelandic municipalities
correspondingly increased the local income tax (Jonsson, 2002: 8). Czech municipalities have long
been struggling with a lack of revenue. With the simplification of administrative structures and
removal of administrative and economic burdens, municipalities should have more financial
resources.
Unlike Iceland the Czech Republic lacks a similar provision like Article 68 of the Local
Government Act, where the central government commits itself to the effort to amalgamate small
municipalities, in cooperation with individual municipalities, local government associations and
regional federations of municipalities. Similarly, the Czech legal system lacks an analogy to Article
6 of the Local Government Act, which obligates the Ministry responsible for amalgamation steps
if the population falls below fifty in three consecutive years. While one can understand that the
implementation of such legal action could be met with resistance in the Czech Republic, as it
could rightfully evoke the forced defragmentation during the communist regime, there is to be
noted that the aforementioned Article 6 allows exceptions if the amalgamation would lead to the
disruption of linkages both within the community and in relation to amalgamating the village.
Althingi always insisted on the principle that merging municipalities must be voluntary
(Hovgaard, Eythórsson, Fellman, 2004: 23).
An Icelandic example to be followed is the widely developed intermunicipal cooperation
(Structure and Operation, 2005: 23), which saves money and contributes to effective spending.
22
But why such cooperation is not inclined in the Czech municipalities remains somewhat unclear.
Economic advantages and the legislature support such cooperation.
The former reveals that the very mechanism of defragmentation is essentially a side issue.
What appears to be crucial is the motivation to merge. If the economic situation does not
necessarily require it, it is appropriate to take such steps that would encourage municipalities to
merge, on a voluntary basis. Island is in this, as pointed out, more than an inspiring example, as it
succeeded in the process in short time, with a general consensus, and achieved economic,
geographic and administrative efficiency and optimization.
8. Conclusion
Island underwent since the 90‘s of the 20th century a successful defragmentation process. Its
course has not yet been completed and further homogenization of the Icelandic local municipal
structure can be, especially as a result of the defragmentation policy of the central government,
expected. An integral part of this process, as we have seen, were reforms in finances,
administration and others. It also strengthened the principle of subsidiarity.
The consequences of this policy will be shown in time. Proponents of municipal
fragmentation warn of loss of belonging to the community. Due to the fact that the process of
merging must be approved in a local referendum, it can be assumed that this risk will be smaller
in comparison with countries where this requirement is not present. Even given the small
population of the country as a whole and individual municipalities, it can be concluded that the
risk is not high.
From a comparative perspective Iceland offers many inspiring elements for those states that
have not gone through the process of defragmentation, but due to primarily economic
motivations it can be expected that they will undertake this process in the near future. A number
of these inspirational elements are explicitly or implicitly referred to in the text. Czech Republic
and other post-communist countries of Europe are among the set of countries where we can
expect a defragmentation of the municipal structure in the near to medium future. It is clear that
each process is different and must be adapted to the political system. Efforts to find the optimal
size of a functioning social system that would minimize the negative consequences of limited
human understanding and management of social systems and is the most positive and beneficial
one for the players concerned, must be found (Mitchell 2009). But there is a plurality of elements
in the Icelandic defragmentation, especially in the reform of the financial and administrative
obligations and requirements, modifications of competencies, referendums regarding
23
amalgamation of municipalities, strengthening the principle of subsidiarity and the overall
legislative amendment, which the Czech Republic can inspire itself by.
In this article, I in the first part focused on explaining the issue of European
defragmentation and basic tendencies and trends that accompanied this process in the second
half of the 20th century. Through the method of Qualitative Comparative Analysis I primarily in
terms of time defragmentation created a basic dichotomy between post-communist countries and
pointed to dominant tendencies that run through them. Then I explained why the Czech
Republic can inspire itself with passed defragmentation processes and why Iceland can serve as a
model. Then I focused on aspects of the successful and still ongoing Icelandic defragmentation.
Against the backdrop of legislative changes and practical problems I pointed out the pitfalls of
defragmentation, from its beginning to its present current state. In the end I briefly introduced
some of the basic problems in the municipal structure in the Czech Republic and pointed to
aspects of the Icelandic defragmentation, which can serve as a test case for the analysis of
phenomena that took place in Europe in the second half of the 20th century, and in many cases
are still under way and can be an inspiring source of information for future policy.
24
Summary
This paper looks at the different stages of European municipal defragmentation and at the
diverse models that post-war countries adopted for their municipal structures. It suggests that
apart from the legislative, identity or economic approach to the study of municipal
defragmentation, its timely aspect, which has until now been escaping interest in the given
discourse, can offer an inspiring insight into the given question. The text thus distinguishes
between countries which defragmented their municipal structures in an early stage, countries
which defragmented recently, countries which underwent defragmentation in both of the
identified periods, countries where defragmentation didn’t take place, former countries of the
Eastern bloc which underwent defragmentation and after their transition to democracy
underwent a reverse process and former countries of the Eastern bloc which underwent
defragmentation and after their transition to democracy continued in the defragmentation
process.
The paper notes that municipal defragmentation was in a number of countries undertaken with
little previous knowledge regarding the possible impacts of the different possible approaches,
which these individual countries chose. It further looks at the problems which countries, which
underwent defragmentation in an early stage, had to face and points out, that countries, which
defragmented recently, had a comparative advantage because they could learn from these
countries’ errors. It identifies two countries of this sort – Germany and Iceland, and concentrates
on the latter case, analysing its defragmentation process as a case study, pointing out the positive
aspects of its defragmentation and concluding it to be a successful one. It understands the
Icelandic defragmentation to be successful, because the effort to reduce the number of
municipalities was not only reached in a significant amount, but it was moreover achieved with
the consensus of the population. In this sense the consensual aspect of defragmentation is
understood to be key, because while the number of municipalities was reduced in countries of the
former Eastern bloc as well, this was not achieved in a democratic and consensual way, which in
a number of cases led to a reverse process of fragmentation after the dissolution of this bloc and
the fall of authoritarian regimes.
The paper sets the Icelandic defragmentation into a wider context by analysing the historical,
economical, legislative, municipal, functional and structural evolution of the different Icelandic
societal and state subsystems, trying to through this insight distinguish traces of the latter success
in municipal defragmentation.
25
Through applying the QCA method of analysis the paper looks at common and distinct features
of the different approaches to municipal defragmentation and draws a sharp dichotomy between
defragmentation trends in post-communist countries and countries of the Western bloc. By
showing that there are trends immanent to post-communist political systems, this paper presents
the idea that these systems can learn from errors made by the initially defragmenting countries.
Drawing on the example of the late-defragmenting Iceland, this paper shows how the currently
or prospectively defragmenting countries can learn from its experience.
The suggestions in the last part of this paper are applied to the case of the Czech Republic and to
possible measures, which it could undertake by learning from the Icelandic experience. Primarily
the positive experience of the New Public Management approach could be applied. A
supplementary suggestion is a launch of a campaign for the defragmentation of municipalities, to
promote the idea among the countries’ citizens and thus to undertake the process in a consensual
manner. Such a campaign could point out the fact that the current municipal structure of the
Czech Republic, based on the Bach and First Republic structure does not, even after the
structural reform which it underwent, meet current needs and necessities of the current public
administration, not only from its geographical, but also from its administrative and economical
aspect. A reform of the different competences, obligations and liabilities of the different public
administration bodies, mainly on the vertical axis, are suggested to be desirable. A reform of the
financial and in general economic dimension of public administration is also identified as
necessary and it is suggested that defragmentation could prove to be beneficial in this way, as
transfer and volume costs could be reduced. A legislative point analogical to article 68 of the
Icelandic Local Government Act, which obliges the central government to amalgamate
municipalities if the number of inhabitants within a municipality falls below fifty, is also identified
as a potentially beneficial one, although its risks, mainly the decrease of consensus, are
understood. Other measures inspired by the Icelandic example are suggested as well, particularly
those of democratic referendums, legislative and economic incentives and municipal cooperation.
An encompassing inspirational aspect of the mutual cooperation of diverse municipalities (and
not only at a national but also at a supranational level) is suggested as a favourable one, providing
opportunities to learn by exchanges of examples of good practices and to reduce costs.
26
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