How should a government be structured so that it functions properly? This question is especially important to post-revolutionary countries looking for new government structures that will be widely accepted.

According to a 2009 study by the Bertelsmann Foundation, Germany's federal system is often admired as an excellent model - in particular its division of powers between the federal government and the states.

But in Germany, more and more people are criticizing the concept of federalism, asking whether the system has become outdated. For these critics, the structure of 16 federal states, with 16 state parliaments, and 16 state governments with their dozens of ministers, state agencies and thousands of officials has become an unaffordable model.

Strapped for cash

The small state of Saarland, for example, shows how high the burden can be: according to recent statistics, each of the state's roughly 1 million inhabitants are 12,000 euros ($15,900) in debt. This is one of the highest per capita debt rates in Germany; only in Berlin, another small state, is the situation worse.

Even the new government will have to accept loans of around 630 million euros to cope with all the state's responsibilities. Only half of this will be spent on investments. The rest will have to be used to pay off the state's debts.

Richer states often send money to poorer neighbors

To alleviate this system, regulations have been in place in Germany for decades to allow poor states to receive money from the richer states like Bavaria and Baden-Württemberg.

But this so-called state fiscal equalization is highly controversial, because the causes behind the lack of finances aren't addressed – money is simply moved back and forth between the states. For that reason some politicians have suggested for years that poorer states should just be merged with the richer states, a debate that has been revived lately.

A strong argument

A group of parliamentarians from all the major political parties has been working on an initiative to reduce the number of states from 16 to, ideally, eight.

"If states merge and do away with their superfluous management structures, billions of euros could be saved," said Garrelt Duin, an economic expert for the Social Democratic Party (SPD) in the Bundestag.

Duin rejects the fear that a smaller government will lead to fewer jobs. "Due to the increasingly aging population, we will end up losing many employees though retirement, anyway," he said. "Instead, we'll have too few candidates to fill the jobs."

If the number of states were to be reduced, there would be other advantages. Duin points out that each of the 16 states has its own Ministry of Education, and as a result, the a degree earned in one state is not necessarily accepted in another. This, for Duin and his colleagues, shows the absurdity of a country with many states.

Attack on democracy?

Reinhold Schnabel, economics professor at the University of Duisburg-Essen, is among the critics of the state consolidation idea.

"All previous attempts to merge authorities have shown that it led to duplication, in some cases increasing the costs," he said. He adds that running a state will always require a certain number of officials, as population numbers cannot be reduced.

"Do you think that when people are calling for more political transparency and expressing a desire for greater citizen participation in politics, the centralization of state functions would be helpful?" he asks.

Schnabel says the many German states are an expression of regional identity, and the price to pay for a vibrant democracy.

A referendum is mandatory before states can be combined

Constitutional requirement

Two previous attempts to reduce the number of states have failed because it was seen as an attack on democracy. Many lawyers refer to Article 79 of Germany's Basic Law, the country's constitution, which enshrines the federal structure of the country and the division into separate states. But the constitution does not define any particular number of states.

Indeed, there is an article in the constitution which allows for the reorganization of states according to certain rules. Among the conditions is a referendum for the concerned states. This has happened only once in the country's history, when the states of Baden, Württemberg-Baden and Württemberg-Hohenzollern combined to form the state of Baden-Württemberg.

But that was in 1952. In 1996, when Berlin and Brandenburg attempted to become one, the vote failed to gain a majority. The people of Brandenburg simply did not want to be run by Berliners.

Author: Wolfgang Dick / cmk

Editor: Ben Knight