1

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 vana@fsv.cuni.cz.

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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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