Policy Diversity in the German Federation. What Drives Länder’s Economic and Societal Policy-Making After the Federalism Reform of 2006?

The regional level in many democracies has been strengthened over the last decades. Accordingly, the federalism reform of 2006 provided the German Länder with 16 additional legislative competences and thereby created space to conduct different public policies. While Germany has followed the path of homogenous policy outcomes for decades, with the reunification of 1990, socioeconomic and political differences between the Länder grew substantially. This paper examines how this intensified territorial diversity affects the policy-making of the Länder. Based on a comprehensive database covering all new fields of competence between 2006 and 2013, we examine the legislative activities of all Länder. As a first step we develop indexes for each field of competence to capture variance regarding the Länder laws. We find interesting differences both between fields of competence and the Länder. The new scope was partly used for diverging regulations, while in other fields we find continuing uniformity. We then conduct a panel data analysis to explain the differences between the Länder laws. We find that the partisan composition of government, the financial power and the religious denomination of the Länder are the main drivers of their economic and societal policy-making. Our contribution is first of all an empirical one as we have established a comprehensive database for all new fields of competence and developed indexes for quantitative analysis. From a theoretical perspective we test for the first time systematically the influence of different socioeconomic and political conditions in the Länder on their policy output.