Why do Municipalities ‘Think’ in Demographic Terms? Governing by Population Numbers in Germany and Poland

What are the mechanisms that make local public services vulnerable to demographic decline? The local provision of welfare services was established during times of growing or at least stable population numbers. Economists consider demographic decline to be problematic because some of the costs for public service provision will remain largely fixed even if capacities are not (completely) utilised. Since public services lack a market environment to ensure the flexible adaption of supply to changing demand, the present chapter looks at the institutional mechanisms by which public administration translates demographic changes into internal problems. Two hypotheses are elaborated and analysed. Firstly, planning and legitimating service production in the public sector rests on an in-kind calculation of service capacities. In this context, (age-specific) population numbers serve as calculative devices to allocate and adapt tasks and resources. Secondly, the degree to which task and resource allocation are bound to population numbers varies between institutional settings. Consequently, the vulnerability of municipal service provision can be expected to vary accordingly. The first hypothesis is investigated using expert interviews, the second on the basis of panel regressions using official data from German and Polish municipalities. The results exemplify that demographic decline diminishes financial resources, increases the benchmark of efficiency for personnel policy, and lessens the symbolic power attached to resident numbers in the political process of territorial reforms.