The long read: Why does Europe have so many more municipalities than NZ?

An AI-generated image of 18th century aristocrats pondering over a map of Europe.

Does New Zealand have too many, too few, or just enough territorial authorities? It’s a frequent area of debate when pondering the state of our local government system. One of the most common points of comparison is Europe’s often overwhelming number of municipalities. But why is this? Why does Europe, especially Western Europe, generally have so many more local government entities than New Zealand does?

What got me thinking about this was a post that Local Government New Zealand’s (LGNZ) Dr Mike Reid shared on LinkedIn over the weekend. Dr Reid is a passionate advocate for localism, and it’s naturally no surprise that he looked at the map shared by Thomas Provok of the Centre for Public Administration Research in Austria and made a friendly observation about those of us who think New Zealand has too many councils.

Now whether we (or Europe for that matter) have too many, too few, or the right amount of local government entities is a discussion that’s never going to be resolved to anyone’s satisfaction. But what the map made me think about is why does Europe have so many local government entities.

The answer is simple: history.

What we need to remember is that the nation-states we recognise on modern maps of Europe are a remarkably recent development historically speaking. Rather than the New Zealand experience where colonialism basically saw a British system of governance transported out here, plopped on top of our islands, and then then we started to fill it out from the top down (with nearly no regard to the te ao Māori systems of governance that existed before colonialism), Europe’s nation-states and the national identities we think of today grew out of a dizzying kaleidoscope of various estates, duchies, counties, cities, church lands, imperial holdings, kingdoms and more that progressively lent their authority to larger sub-national and ultimately national entities.

Even within each of those smaller entities (which is not a complete list of the various fiefdoms by the way) there were further patchworks of even more hyper-localised centres of authority and identities sitting underneath them. For much of Western Europe, the nation-states and federal/national level authorities we recognise today were added on top of already deeply entrenched and long-established systems of governance.

Take the Holy Roman Empire for example. By the 18th century there were around 1,800 different entities that made up the patchwork of the empire and there were typically very stubborn about maintaining their own freedom of action - hence the long-standing joke that the Holy Roman Empire was neither holy, Roman, or an empire.

A map of the Holy Roman Empire in 1789. Note that this is only the states that were nominally sovereign within the empire (even if it practice many of them weren’t), and within the larger entities on the map (e.g. the Electorate of Brandenburg) there’s the same underlying pattern of much smaller localised entities.
By Robert Alfers - own work, CC SA 3.0, https://en.m.wikipedia.org/wiki/File:Map_of_the_Holy_Roman_Empire,_1789_en.png

In France, while the French commune system is relatively recent having been established at the beginning of the French Revolution, it too was built on the top of pre-existing structures with a large dose of revolutionary violence to make it stick and to break the dominance of the church in the administration of local affairs. Some 60,000 paroisse (parishes) sat alongside the various seigneur (feudal lords), and both were forcibly combined into the new administrative system of the Revolution. This hierarchy went: national government > départments, arrondissement, cantons, and finally communes. It was an attempt to bring some uniformity to what was previously a very organic system of local authority. 60,000 paroisse as well as various cities, towns, villages, and estates were merged together into approximately 41,000 communes, with plenty of confiscations of property and violence meted out to those who objected (and many did, and not just those who had lost status and power).

This map of the paroisse in Paris from 1786 gives an indication of just how hyper-local we’re talking when it came to metropolitan areas, with Paris’ population at the time being somewhere in the region of 650,000 people.

The current map of the nearly 35,000 communes is equally as dizzying.

A map of the commune borders of European France in 2021. By Godefroy - Own work, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=4275870

Now, while the communes are slightly different - in that they represent Revolutionary France trying to rationalise and assert its dominance over the governance arrangements Ancien régime - and especially the church - they still fall back on many of the same centuries old structures of hyper-local decision-making.

In both these cases, the modern nation-states today were ultimately given their legitimacy and were only able to exercise their new found authority by being built on top of these pre-existing governance arrangements. Often they acquired the right to do that by force, but the exercise of power was still done via these often ancient arrangements, even as the new nation-states tried to forge wider national identities at the expense of much smaller local ones. Prior to the advent of the modern nation-state and the centralised governance structures around it, even where a single monarch nominally exercised authority over a country, it was done so with a very small government that was largely an extension of the structures in their personal holdings, versus the more professionalised national-level governments that emerged in the post-revolutionary period.

It’s also this background that helps understand why these sub-national and more localised authorities have a greater share of overall public expenditure than their equivalents in New Zealand. The new centralised national governments were either directly created or had to assert themselves over the top of these pre-existing revenue and expenditure structures, which leads to a very difference governance dynamic than exists in New Zealand.

Whereas sub-national government in New Zealand is responsible for around 10 percent of public expenditure, in Germany the three Stadtstaaten (city states) and 13 Flächenländer (area states) are responsible for 31 percent of public expenditure, with sub-state units taking another 19 percent - leaving 50 percent for the Federal Government. The balance in France is a bit different, in large part thanks to Revolutionary Paris’ often violent implementation of its reforms to eradicate all trace of the Ancien régime, with local government having around 20 percent of public expenditure. Denmark (depending on how you count things) either comes out at a 50/50 split, though some suggest it’s actually two-thirds in favour of local government. The OECD average for local government apparently sits around 37 percent.

So why is it so different here? Local government and central government in New Zealand essentially developed concurrently with each other using a British system that had been transported over for the purpose - and with little regard to pre-existing Māori systems of governance.

This is a very short and simple timeline - and I thoroughly recommend Dr André Brett’s Acknowledge No Frontier for a comprehensive history of provincial government in New Zealand.

Essentially local government got a head start with an attempt to allow communities to establish their own municipal authorities in the fledging colony from 1842. But the new colonial government quickly decided this arrangement didn’t work for them (apparently because in a story as old as time, they found local government was annoying to deal with when they wanted to build lighthouses). What followed over the next decade was a variety of different attempts to establish varying degrees of local government with very narrowly defined responsibilities (e.g. road building).

From 1853 to 1876 we had a short-lived provincial system, but again, this arrangement didn’t work for central government (itself coming into being via the creation of Parliament in 1854), and it really didn’t work for the provinces either as they were stuck between governance and financial dysfunction. So after a few attempts to tinker with the system, it was abolished in 1876 and New Zealand ended up with it’s highly centralised system where the central government reined supreme both legislatively and fiscally, and could make and unmake local government as it wished.

Whereas in Europe, if and when the newly established central governments tried to do that, it was often met with or could only be enforced with violent compulsion.

To simplify things, Western Europe had centuries (sometimes millennia) old identities and local power structures that the new centralised nation-states had to strike a balance with to both establish their legitimacy and exercise their authority through.

In New Zealand, we tried to establish our local government and central government systems, and develop our national and local identities, currently. We did so with imported systems that overrode pre-European indigenous arrangements, and the colonial central government quickly realised it held all the trump cards and kept them close to its chest. The settler communities, who were grappling with simply getting established in the new colony, simply didn’t have the depth of connection, identity, and strongly enough established local governance structures to do much about it which saw central government quickly take over.

Now it’s important to point out here that I’m not making an argument about whether Europe’s often hyper-local or New Zealand’s hyper-centralised system is better than the other. There’s trade offs in both and tomes have and will be written arguing about it for decades to come. But what’s important to understand is that the dynamics of central for local government arrangements, including the size, powers, and quantity of local government entities, is entirely contextual to the development of the country in question.

If we wonder why Western Europe has so many local government entities - it’s because that’s where the legitimacy of the modern nation-states came from - overlaid on top of thousands of sub-national identities and centuries old governance structures. If we wonder why New Zealand has so few - it’s because we’re the product of British colonialism that in our case led to an assertive colonial government centralising all the power in its hands before any strong local identity or governance structures could take root in the settler communities.

The central/local split in Europe grew out of the pre-existing local power structures, in New Zealand it was placed here from the top-down.

If anything, New Zealand is arguably better placed now to think about what a better central/local government split might be. However, it’s not likely to happen unless everything breaks. A highly centralised government is not naturally inclined to meaningfully devolve its authority and revenue raising powers lightly - it’s just not a politically advantageous thing to do for those in the roles. Just as sub-national entities in Europe have tried to defend the erosion of their centuries old historic powers and identities in the face of emerging centralised governments.

It’s not that Europe’s plethora of local government entities or our comparative paucity of them are better or worse than each other. Ultimately you probably couldn’t take European hyper-localism and translate it here. Nor could you necessarily drop New Zealand’s system on top of a European country either.

Local government systems, their legitimacy, their powers, and their effectiveness, likely owe more to the contextual historical forces that have shaped the balance between central and local government in each country, rather than some idealised theory of what might work best - and this applies for both more regionalised and localised entities. In Europe’s case it evolved out of necessity to balance the needs of the new nation-states we recognise today with the existing centres of local authority. Whereas in New Zealand it was enforced by a colonial government driven by what it saw as the necessity to exert its dominance over the direction of affairs and development here.

Of course, if you look back at Provok’s original map, there’s a whole book to be written about the dynamics of sub-national local government entities between Western, Southern, Northern, Central, and Eastern Europe and the role that population density, autocratic rulers, national identity, wars and so forth have played in creating different approaches within the continent. But that’s a story for another time.