Reforming Federalism in Germany: Incremental Changes instead of the Big Deal

The unique characteristics of Germany’s federalism have been long identified as one of the main obstacles to legitimate and efficient governance. In 2006, the grand coalition adopted a federal reform which aims to disentangle the intertwined levels of government by reducing the influence of the La « nder governments in federal policy-making and strengthening the La « nder by granting more legislative competences to the federal states. In this article, I summarize the reasons for the constitutional change, provide a short overview of the reform process, and evaluate its results. I argue that the achieved compromise will only lead to incremental changes in Germany’s feder-alism and will not be sufficient to solve the perceived problems of Germany’s federal structure. Once Germany’s constitution, the so-called ‘‘Basic Law,’ ’ was celebrated for Germany’s successful transformation from a dictatorship into an exemplary democracy. Beside substantial basic rights granted by the constitution, the Basic Law created the legal and political framework for the ‘‘German Model,’ ’ which boosted economic development and social achievements after World War II. The decline of the German Model, so it seems, has raised a genuine unease about the ‘‘dusted constitution’ ’ (Darnstädt 2003). The functioning of the federal system