Brenner N - Building ‘Euro-Regions’ - Locational Politics and the Political Geography of Neoliberalism i

8/6/2019 Brenner N - Building Euro-Regions - Locational Politics and the Political Geography of Neoliberalism i

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BUILDING EURO-REGIONS

LOCATIONAL POLITICS AND THE POLITICAL GEOGRAPHY OF NEOLIBERALISMIN POST-UNIFICATION GERMANY

Neil BrennerNew York University, US A

Regions,states and the polit ical geographyof neoliberalism

[T]he apparent resurgence of the regions makes less

sense as a phoenix-like re-emergence of regionaleconomic crucibles than as the effect of top-downpolicies to replace the imagined community at thenational level with an imagined unit of competition atthe regional level. (John Lovering, 1999: 392)

[M]uch new regionalist thinking has paid insufficientanalytical observance to the intricate social relations andinterconnecting proper ties that may exist between therecent regional renaissance and the restructuring of the

state. (Gordon MacLeod, 2000: 221)

The phrase Standort Deutschlandhas become a key-word of German political discourse during the1990s. Literally, Standortmeans location, as forinstance in a location delineated on a city map.However, in the current political conjuncture in theFederal Republic of Germany (FRG), the notion ofa Standorthas acquired a more specific andideologically charged meaning: it refers to a locationfor capital investment, and implicitly, to thestructural competitiveness of that location relativeto other possible locations within and beyond thenational territory. T he locations in question vary ingeographical scale, from the national economy

(Standort Deutschland) to regional economies

Abstract

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European Urban and Regional Studies7(4): 319345 Copyright 2000 SAGE Publications0969-7764[200010]7:4; 319345;014486 London, Thousand Oaks, CA and New Delhi

Against the background of recent debates on statespatial restructuring in the European Union (EU),this article elaborates a crit ical geographicalinterpretation of the contemporary debate onlocational competitiveness (Standortdebatte) in theFederal Republic of Germany (FRG). On the onehand, the current debate on Standort Deutschland(Germany as an investment location) represents thegrowing instability of the Rhine model of capitalism

under conditions of accelerating globalization andEuropean integration. In this aspect, thecontemporary locational debate has served to justifyvarious forms of deregulation and institutionalerosion at each level within the German politicalsystem. On the other hand, the contemporarylocational debate has also entailed the delineation ofnew subnational geographical targets for majorsocio-economic policies. The protection andenhancement of nationally specific competitiveadvantages within an integrated European economyis increasingly seen to hinge upon the constructionof Euro-regions associated with territorially specificconditions of production, socio-economic assets and

institutional forms at subnational scales.The politicsof deregulation in post-unification Germany havetherefore been closely intertwined with a broaderreterritorialization and re-scaling of state power inwhich new subnational institutional spaces are beingmobilized as the geographical spearheads forrenewed economic growth. These arguments areillustrated with reference to two major realms ofdebate on locational competitiveness in the post-

unification era, each of which has entailed adistinctive scalar articulation of neoliberal politicalagendas: the regionalization of national spatialplanning policies (Raumordnungspolitik); and thedebate on competition federalism (Wettbewerbs-fderalismus) and fiscal equalization (Finanzausgleich)among the German Lnder. However, againstessentializing interpretations of subnational regionsas privileged geographical loci for neocorporatistsocial compromises or for post-Fordist spatial fixes,contemporary regionalization processes in the FRGare conceptualized here as an institutional mediumthrough which the German state is engaging instrategies of crisis-management.
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(Standort Hessen, Standort Bayern, Standort Sachsen)and individual cities (Standort Berlin, Standort

Hamburg, Standort Frankfurt), but throughout theFRG major debates on socio-economic policy andinstitutional restructuring are being conducted interms of an overarching question: To what extentdoes a given policy or state institution contribute to,or undermine, the structural competitiveness of aparticular Standort? From this perspective,economic competition is viewed as a struggle notbetween firms but between political jurisdictions (be

it at national, regional or local scales) to fix mobileforms of capital investment within their boundaries.The catchword Standortpolitik translated here aslocational politics is being used widely inGerman political discourse to refer to the diversestrategies through which state institutions areattempting to achieve this goal.

In general, debates on the future ofStandortDeutschland(Germany as an investment location)have been dominated by the rather anxious assertionthat the German national economy has becomeuncompetitive within the European Union (EU)and the world economy due to its high labour costsand taxes and its burdensome regulatory system.Although diverse political-economic trends havebeen invoked in the contemporary Standortdebate,the apparent stagnation of the German economicsystem in the current period is generally said to havebeen caused, or to have been severely exacerbated,

by intensified global economic competition underthe new international division of labour, by the newcompetitive pressures associated with the latestthrust of European economic integration, and bythe massive financial burdens that have resultedfrom reunification (Albert, 1993; Lpple, 1997;Streeck, 1997). However, whereas diagnoses ofGermanys Standortproblems differ in emphasisand focus, they have nonetheless convergedmarkedly in their proposed solution namely,deregulation (Bergmann, 1998).

During the course of the 1990s, the concept ofStandort Deutschlandhas become broadlysynonymous with a cost-cutting, neoliberal politicswhich aims to downgrade existing social protections,to enhance competitive pressures upon majorpolitical institutions and societal actors, and,thereby, to bring the German political system moreclosely into alignment with regulatory standards

within other EU countr ies.1 As Deppe and Detje

(1998: 162) indicate: Above all since the 1980s, theStandortdebate has had the function of weakeningtrade unions, eroding the welfare state andundermining wage regulations. T his neoliberalpolitical agenda, oriented towards lowering the costsof production, expanding commodification,enhancing the discretionary power of capital androlling back entrenched political compromises, hasbeen articulated in a range of policy debates incontemporary Germany including, for instance,labour market and industrial policy, monetary and

financial policy, technology, health and educationalpolicy, debates on internal security, policing andcrime control, and immigration policy. In each ofthese spheres, the question of locationalcompetitiveness has figured ever more prominentlyin public political discourse during the 1990s(Bischoff et al., 1998). In this sense, the Standortdebate has served as one of the major politicalcatalysts through which neoliberal policies havebeen mobilized in post-unification Germany. Moregenerally, the current Standortdebate can be viewedas a vivid political expression of the growingstructural instability of the so-called Rhine model ofGerman social capitalism with its high wages, itsstrong export orientation, its elaborate system ofsocial welfare and its intricate system of corporatistcollective bargaining which underpinned theGerman political economy throughout most of thepostwar period and, in a restructured form, well

into the 1970s and 1980s.2This article approaches the contemporaryStandortdebate as an analytical lens through whichto explore various ongoing transformations withinthepolitical geography of post-unification Germany.Insofar as it refers to a territorialized ensemble ofproductive capacities, socio-economic assets andinstitutional forms, the notion of a Standortisprofoundly geographical. In particular, threedistinctively geographical dimensions ofcontemporary debates on locational politics can bedistinguished:

1. Debates on locational politics entail thedelineation of determinate spaces of competitiveness from the national economy to regional and urbaneconomies which are seen as the key territorialzones in which place-specific economic advantagesare to be promoted.

2. Debates on locational politics also entail the

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delineation of determinate spaces of competition such as the world economy or the EU in relationto which the Standortin question is to bestrengthened.3. Debates on locational politics entail themobilization and/ or construction ofscale-specificstate policies and institutions whether of thenational government, the Lnder, metropolitanauthorities or municipalities by means of whichlocalized competitive advantages (spaces ofcompetitiveness) are to be strengthened in relation

to broader competitive pressures (spaces ofcompetition).

Building upon these distinctions, I argue herethat the current neoliberal offensive in post-unification Germany has been articulated in adeterminate geographical form. Locational politicshave entailed not only the consolidation of newpolitical priorities (such as global structuralcompetitiveness, flexibility and constant innovation)

and regulatory strategies (such as cost-cutting,deregulation and institutional downgrading), butalso, just as crucially, the delineation of new spacesof competition, new spaces of competitiveness andscale-specific policies and institutional formsthrough which renewed economic growth isintended to occur. In contrast to theFordistKeynesian project of national-developmentalism, in which diverse socio-economic

regulations were introduced by the German centralstate to promote the balanced growth of the entirenational economy, the contemporary Standortdebate in the F RG has entailed a redifferentiation ofnational economic space into an amalgamation ofsubnational economic spaces (including Lnder,regions and cities) which are increasingly said tohave their own distinctive developmentaltrajectories. Under these circumstances, thepromotion of national competitiveness within an

integrated European economy is seen to hinge uponthe construction of Euro-regions associated withterritorially specific conditions of production, socio-economic assets and institutional forms atsubnational scales. T hus the regional scale is nowwidely promoted as the key territorial arena foreconomic competitiveness while theEuropean scaleis increasingly seen as the natural zone foreconomic competition.

Strategies of endogenous regional development

in the FRG and elsewhere have frequently beengrounded upon associationalist, social democratic,

neocorporatist and neo-Keynesian political agendas(Cooke and Morgan, 1998; Eisenschitz and Gough,1993; Herrigel, 1996; Scott, 1998). I argue here,however, that we are today witnessing thearticulation of specifically neoliberal projects ofregionalization in the F RG that privilege economicgrowth over social redistribution, competition overcooperation, cost-cutt ing over regulatory protection,labour discipline over class compromise and

efficiency over democratic accountability. Withinthis emergent neoliberal project of Euro-regionalism (MacLeod, 1999), each subnationaladministrative entity is increasingly being forced tosecure on its own the socio-economic preconditionsfor maintaining structural competitiveness andconstrained to relate to other European regionsprimarily as hostile brothers (Peck and Tickell,1994) in a zero-sum race for external capitalinvestment and jobs. In this sense, the neoliberal

backlash in post-unification Germany has beenclosely intertwined with a reterritorialization and re-scalingof national state power in which diversesubnational institutional spaces are being mobilizedas the geographical spearheads for renewedeconomic growth. More generally, through thiscase-study of post-unification Germany, I argue fora more sustained attention to the role ofnationalstate institutions both as animators and as mediators

of the contemporary regional resurgence in theEU (see also Brenner, 1998a; Jones and MacLeod,1999; Lovering, 1999; MacLeod, 2000).

Against essentializing interpretations ofsubnational regions as privileged geographical locifor neocorporatist social compromises or for post-Fordist spatial fixes, contemporary regionalizationprocesses in the FRG are analysed here as aninstitutional medium through which the Germannational state is engaging in strategies of crisis-

management. From this perspective, neoliberalpolitics in the F RG have entailed the construction ofnew regional projected spaces (Lipietz, 1994) unstable, emergent and contradictory regulatoryexperiments articulated within determinateterritorial boundaries rather than the solidifiedinstitutional basis for a new mode of regulation or acoherent resolution to the deepening crisis ofRhineland capitalism. A central goal of this analysis

is to explore the role of such regionalized projected


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within a larger, nationally focused system ofadministration, industrial growth and sociospatial

cohesion. Throughout the postwar era, theseassumptions were art iculated and implemented ateach level of the German administrative hierarchy(central state, Lnder and municipalities) in a rangeof institutional contexts and policy debates forinstance, in debates on federalism, fiscal equali-zation and the territorial redivision of Land andcounty borders; in discussions of centrallocalrelations, administrative rationalization, public

service provision and municipal autonomy; and inimportant aspects of social policy, infrastructuralpolicy, spatial planning and industrial relationspolicy.5

The history of postwar spatial planning policy(Raumordnungspolitik) in the FRG illuminates thisconstellation of political-geographic practices andinstitutions. Since the approval of the SpatialPlanning Law (ROG) in 1965, the core goal ofspatial planning in the FRG has been the

equalization of life-conditions (Herstellunggleichwertiger Lebensbedingungen) throughout thenational territory (ROG, 1965: 56).6 The originalversion of the ROG was grounded upon the notionthat balanced economic development could occuronly through the equalized spread of urbanizationamong central places that were symmetricallypositioned throughout the entire national territory(Brenner, 1997). From the 1950s until the late

1970s, this overarching goal of producing andmaintaining a spatial equilibrium at a national scalewas pursued through various forms of federallyfinanced public service provision, infrastructureinvestment and subsidies, particularly in rural andso-called lagging areas, which were to be promotedas sites of industrial growth and populationsettlement. The Joint Task for the Improvement ofRegional Economies of 1969 (GRW) likewisepursued the goal of promoting investment in

regions whose economic capacities were beneath thefederal average. T he Territorial Reform of the1970s was grounded upon closely analogousassumptions: its central priority was to r ationalizestate bureaucracies by simplifying the hierarchiesand mechanisms of public service provision. In1975, the Federal Spatial Planning Programmeslightly modified the postwar framework for spatialplanning by redefining its territorial units; however,

even within this revised framework, the basic goal of

securing spatial equilibrium and equalized life-conditions at a national scale was replicated in its

original form (Vth, 1980: 21170).It was not until the early 1970s, as the Fordist

regime of accumulation was destabilized throughoutthe older industrialized world, that this national-developmentalist model of political and economicspace began to unravel in the FRG (Hirsch andRoth, 1986). On the one hand, the global economiccrises of this period triggered a wave of profoundinternal sociospatial restructuring manifested, in

particular, in processes of de-, neo- and re-industrialization which severely intensifieddisparities among the major West German cities andregions. T he resultant geographies of internalspatial polarization whose basic contours havepersisted well into the post-unification period have replaced the classical Fordist oppositionbetween core industrial cities and peripheral ruralhinterlands with new forms of interspatialcompetition and uneven geographical development

throughout the German urban and regional system.7On the other hand, from the late 1970s to the late1980s, these transformations of Germanyseconomic geography occurred in close conjunctionwith a number of institutional shifts that preservedmany of the basic institutional features of the Rhinemodel while nonetheless subtly redefining itspolitical-geographical foundations (Herrigel, 1996;Simonis, 1998; Streeck, 1997).

Throughout the 1970s, an array of nationalcrisis-management strategies were mobilized by asuccession of governing coalitions led by the SocialDemocratic Party (SPD) under the Brandt andSchmidt chancellorships. Following an initial waveof administrative centralization under Brandtssocio-liberal coalition in the early 1970s, theSchmidt Government attempted to modernize theRhine model through the introduction of newtechnology and labour market policies intended to

strengthen West Germanys most internationalizedfractions of capital (Hirsch, 1980; Jessop, 1989).The neo-conservative Wende (turn) of 1982signalled less the dissolution of this strategy thanits self-correction through a rejuvenatedeconomic attack on the world market (Jessop, 1989:272). T he Kohl Government abandoned classicalKeynesian priorities, such as full employment, infavour of supply-side measures to rejuvenate

industrial expansion, to accelerate technological




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innovation and to loosen labour market rigidities,particularly in the export-oriented capital goods

sector (van der Wurff, 1993). As Schlupp (1992:317) notes, the Wende introduced under Kohlsignalled:

. . . a change in accumulation strategy in the direction ofa supply-side policy with the goal of improvingprofitability by means of lowering costs (that is, wages),increasing productivity, reducing business taxes,decreasing social expenditures, diminuating labourprotection laws, wage structures and generally making

more flexible conditions and hours of work.

However, in addition to these deregulatorytendencies, the Kohl Government also attempted toprotect the global strategic position of West Germancapital by introducing reinvigorated technologypolicies and by rechannelling public funds intoresearch and development projects. Part icularly inSPD strongholds such as North Rhine Westphalia,the Saarland, Bremen and Hamburg, Land

governments focused their attention primarily onthe restructuring of older industrial sectors.Meanwhile, the federal level played a particularlyactive role in mobilizing public resources to enhancethe competitiveness of German high-technologyindustries. In contrast to the relatively pure formof neoliberalism elaborated under T hatcher in theUK during the 1980s, neoliberal politics in the FRGduring this period linked various deregulatory

policies, tax breaks and welfare state retrenchmentto an intensive mobilization of state institutions toenhance the global competitiveness of Germancapital (Lpple, 1997; van der Wurff, 1993).Although supply-side and monetarist currentspromoted various forms of deregulation,privatization and liberalization, a leaner welfarestate and more flexible work conditions throughoutthe 1980s, Kohls version of neoliberal politicsfocused equally upon the issues of technological

innovation, structural competitiveness and laboursupply in large- and medium-sized export-orientedfirms (Esser, 1998; Jessop, 1989; Simonis, 1998). Inthis sense, as Schlupp (1992: 31718) notes, thewave of political-economic restructuring thatunfolded under the Kohl Government wasgrounded upon a mixture of neo-liberal,traditionally fiscal-conservative, pragmatic-conservative and neo-technocratic and tatist

elements of economic and social policy. T he more

recent Wende associated with German reunificationmust be viewed as an extension of this mixed

neoliberal, neoconservative, neotechnocratic andneostatist accumulation strategy in the context ofGermanys geopolitical manoeuvres to strengthen itshegemonic power within the EU.

Geographies of crisis-management:anemergent politics of endogenous growth

The so-called crisis of Fordism implies a significantrescaling of a series of regulatory practices. . . . Inparticular, regulatory codes, norms, and institut ions arespatially shifted from one scale to another. T heserescalings are invariably highly contested, and theoutcome varies considerably from scale to scale. (ErikSwyngedouw, 1997: 156)

Throughout the 197389 period, the national

geographies of West German Fordism weresubjected to powerful new tensions and internalfissures. On the one hand, the federal governmentintroduced a number of initiatives to address thespecific problems of rustbelt regional economies,most prominently, the aforementioned Joint T asksInitiative, or GRW. Nonetheless, most major centralstate socio-economic and spatial planning policiescontinued to promote the national scale as the

predominant institut ional nexus for industrialgrowth, for neocorporatist social compromises andfor crisis-management (Benz et. al., 1999). On theother hand, throughout this period, economicrestructuring in the FRG unfolded in regionallyspecific forms, leading to a range of place andterritory-specific political responses by the Lnder.Hence, even as the central state continued to deployneo-Keynesian strategies of crisis-management andto pursue the traditional Fordist goal of subsidizing

growth in lagging areas throughout the 1970s,Lnder such as North Rhine Westphalia, Hamburg,Bremen and the Saarland elaborated regionallyspecific industrial, technology and employmentpolicies to confront the economic problems of theirmanufacturing-based cities and regions. In thiscontext, the priority of promoting what was popularlylabelled endogenous development (endogene

Entwicklung) within regional and local rustbelt

economies acquired an unprecedented centrality to




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political debate within many of the Lnder.8

Although these subnational strategies of endogenous

economic development within monostructuralindustrial regions were generally grounded upontraditional social democratic strategies of classcompromise, redistribution and collectiveconsumption, they played an important role inlaying the institutional and political foundations forthe neoliberal projects of regionalization thatsubsequently emerged during the post-1989 period.9

The Ruhr industrial region of North Rhine

Westphalia (NRW) represents a paradigmaticinstance of a social democratic politics of endogen-ous growth within a regional rustbelt during thepost-1970s period. During the 1970s and 1980s,various regional economic and social policies weredeployed in the Ruhr region, whose major extractiveand manufacturing industries (in particular, coal andsteel) were in the midst of a deep structural crisis.10

In contr ast to earlier federal and Land policies ofdirectly subsidizing declining industries, these

regional programmes attempted to diversify theregions technological base by improving variousplace-specific economic conditions such asinfrastructure, transportation, labour qualificationsand production sites. These bootstrapping regionalpolicies were widely viewed as a means to establishnew capacities for local economic development, toovercome technological lock-ins and thereby tocounteract industrial decline. According to one

advocate of such policies in the early 1980s:Endogenous development str ategies proceed from thespecific, natural locational advantages of individualregions. They seek out, for instance, industrialtraditions, part icular qualifications of the local labourforce, existent resources, in short, special regionaltalents. Such strategies then attempt to make use of thepossibilities for regional development which can berecognized on this basis. (Schulz-Trieglaff, 1983: 172)

Early versions of such endogenous growthpolicies in the 1970s included the RuhrDevelopment Programme of 196873 and theNorth-Rhine-Westphalia (NRW) Programme of1975. The Ruhr Action Programme of 1979 entaileda partial retreat into a more defensive strategy ofpromoting industrial modernization in decliningindustrial sectors, such as mining. However, in theearly 1980s, the Land government of NRW

introduced a more aggressive programme for

reinvigorating endogenous regional growth: theLand Initiative for Future Technologies. This

policy was expanded in the late 1980s with theintroduction of two additional regional industrialprogrammes, the Initiative for the Future of Coal,Iron and Steel Regions in the Ruhr region (ZIM)and the Initiative for the Future of the Regions inNorth-Rhine-Westphalia (ZIN) which extended theZIM throughout the entire Land of NRW(Danielzyk, 1992).

The regional policies deployed in the Ruhr

district during this period had a markedneocorporatist character: they were not imposedfrom above by the Land government but resultedfrom negotiations between diverse local and regionalorganizations, including major firms, chambers ofcommerce, trade unions, municipalities and civicgroups; their overarching goal was to minimizeregional inequalities while recognizing historicallyentrenched particularities (Heeg, 1996: 216). T hepurpose of the ZIM was to improve the

cooperation between state authorities and regionaltarget groups in both the public and the privatesector . . . [Meanwhile] the government takes up therole of moderator, mediator or catalyst to promotethe regions endogenous potential (Hesse, 1987).Thus, in addition to the project of reestablishingindustrial competitiveness, these regional policiesintroduced diverse redistributive strategies. AsDanielzyk (1992: 98) notes, their basic goal was to

target the potentialities, needs and deficits withinthe region while decentralizing political conflictsand distributional battles. Analogous projects topromote endogenous growth potentials wereadopted during the 1980s in a number of otherLnder, including: the Rural Regional Programmeof Hesse in 1984; an initiative to establish regionalproduction networks in the flax and linen sectors inthe Bergischen Land in 1988; and the AutonomousRegional Development Programme in Baden-

Wrttemberg in 1988 (Schikora, 1994: 9798).11During the same period, the German trade

union confederation (DGB) likewise elaborated avariety of regionally specific policy demands in theface of persistent mass unemployment andsustained economic crisis in the older industrialregions (Albers, 1994; Herrigel, 1996: 2823).Throughout the 1970s and 1980s, theseprogrammes focused on issues such as job creation

and the reduction of working time, particularly in




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the steel and shipping sectors within rustbelt regionssuch as the Saarland, the Ruhr district, Bremen and

Hamburg. In addition to employment-creationmeasures, many regional branches of the DGB alsoattempted to establish labour retraining programmesand negotiated strategies of technological inno-vation. As noted, many of the trade unions wereinvolved in the development of regional restructuringpolicies in NRW; analogous arrangements wereestablished in regionally specific forms in Bremenand the Saarland during the 1970s and 1980s.

These early forms of endogenous regional policyin the FRG can be viewed as strategies ofneocorporatist crisis-management that emerged inresponse to regionally specific processes ofindustrial restructuring and economic decline. Onthe one hand, they articulated an approach toindustrial restructuring which, in contrast to theneo-Keynesian redistributional policies deployed bythe central state during the 1970s, focused on theendogenous developmental potential of regional

industrial complexes rather than upon thearticulation of regional economic spaces to thenational space-economy. Regionally specific policyframeworks and institutional forms wereintroduced, under these conditions, in order toconfront place-specific regulatory problems, socio-economic dilemmas and political conflicts (Herrigel,1996: 27586). On the other hand, in contrast to thelater forms of endogenous growth policies that were

subsequently adopted throughout the FRG, theregional neocorporatisms of this era explicitlyprivileged the issues of social balance (Ausgleich)and cross-class political compromise over theproductivistic imperatives of growth, innovationand structural competitiveness. The regionalpolicies of the 197389 period can thus be aptlylabelled neo-Fordist: throughout this phase of statespatial restructuring, the classical Fordist project ofspatial equalization was transposed from thenational to the regional scale by means of theseemergent subnational neocorporatisms.12

It should be noted, however, that the rudimentsof a neoliberal, cost-cutting politics of endogenousgrowth were already being promoted during thisperiod in the sphere of centrallocalintergovernmental relations. As of the mid-1970s,the German central government began to pressurethe municipalities to fend for themselves in

promoting local economic development and in

managing the local social consequences of industrialrestructuring (Huermann, 1992). Some left-wing

commentators initially interpreted this tendency asthe basis for a renewal of politics from below inwhich municipalities could potentially serve as acounterforce (Gegenmacht) to the neoliberalagendas of the central state (Bullmann andGitschmann, 1985). However, as various criticssubsequently indicated, these decentralizationmeasures operated above all as strategies of off-loading to the periphery through which the German

central state was attempting to delegate downwardsvarious fiscal responsibilities and socio-economictasks (Krtke and Schmoll, 1987). Consequently,confronted with a vicious circle of decliningrevenues, increased administrative burdens andgrowing socio-economic polarization, West Germanmunicipalities began to restructure themselvesaggressively in order to manage the deepeningurban crisis and to promote renewed capitalinvestment within their territorial jurisdictions.

As of the early 1980s, new entrepreneurial urbanpolicies were being elaborated as municipalitiesthroughout the FRG attempted to streamline localadministration, to roll back entrenched systems ofpublic service provision and to enhance locallyspecific economic assets (Krtke and Schmoll, 1987;Mayer, 1991; Rdenstein, 1987). T hroughout the1980s, Germanys local states were transformedfrom local social welfare agencies into instruments

of entrepreneurial policies that attempted above allto enhance the competitive positions of theirterr itories, often through the privatization of publicservices, the deployment of new economicdevelopment and boosterist policies, theconstruction of publicprivate partnerships in keyplanning projects as well as through deregulation,administrative reform and tax cuts. In short , the taskof establishing the social, infrastructural andterritorial conditions for renewed accumulation

within major German cities and city-regions wasbeing gradually transferred downwards, towards theLnder and the municipalities. T he Fordist projectof forcing municipalities to adapt to central statemacroeconomic policies was thereby displacedduring the 1980s by a broadly neoliberal project offorcing localities to become self-reliant(eigenstndig) in securing financial resources,external capital investment and popular legitimation

(Mayer, 1991; Rdenstein, 1987). Thus, in marked




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contrast to the politics of endogenous regionalgrowth dur ing the 197389 era, which were

generally grounded upon neocorporatist priorities,the politics of endogenous local development duringthis period privileged neoliberal goals such asmaintaining structural competitiveness,administrative efficiency and a good businessclimate over questions of redistribution, classcompromise or local democracy.

By the late 1980s, the political geographies ofnational-developmentalism in the FRG had been

significantly unsettled: the entrenched, nationallycrystallized scalar hierarchies of state administra-tion and political regulation upon which the Rhinemodel had been grounded were being systematicallyreshuffled in conjunction with diverse subnationalregulatory experiments and restructuring strategies.The project of establishing a spatial equilibrium ona national scale through the redistribution ofpopulation, state subsidies and private investmentswas severely undermined as new projects for

promoting endogenous growth at subnational scaleswere introduced by the Lnder and the munici-palities. These early projects of endogenous growthwere initially articulated as strategies of crisis-management from below under conditions inwhich central state support for declining regionsand cities was being rolled back. Nonetheless, as thepreceding discussion indicates, the political contentof these local and regional economic initiatives

remained quite heterogeneous throughout the 1980sinsofar as diverse models of endogenous socialdemocratic, neoliberal and hybrid werearticulated at various institutional niches and terri-torial locations within the German administrativehierarchy. By contrast, during the 1990s a specificallyneoliberal politics of regionalization has beenarticulated in important policy arenas within theGerman federal system. Before we examine thisrealignment, the German Standortdebate and its

associated neoliberal politics must be situated withina broader geopolitical and geoeconomic context.

Geographies of the Standortdebate:neoliberalism and the locational hysteria

Since the global economic crises of the early 1970s,

the basic message of neoliberal national

governments throughout the older industrializedworld has been twofold: first, that excessive state

intervention in the form of Keynesian and socialdemocratic policies has been a primary cause ofeconomic stagnation, inflation and unemployment;and second, that the current economic crisis couldbe resolved only through a radical reduction ofgovernment spending, the dismantling of inheritedFordist collective bargaining arrangements and theconstruction of more open, competitive markets.The most aggressive neoliberal counter-revolutions

took place in the USA under Reagan and in the UKunder Thatcher during the 1980s, but a politics ofmarket-access neoliberalism has subsequently beenadopted by neoconservative, christian democraticand centrist social democratic regimes in westernEurope, in the former state socialist countries ofEastern Europe, in Latin America and in other partsof the erstwhile Third World (Agnew andCorbridge, 1995; Moody, 1997; Overbeek and vander Pijl, 1993).

As indicated, neoliberal politics were introducedin a mixed form in the FRG during the 1980s underKohls christian democratic regime insofar as itcombined various deregulatory policies with newforms of industrial, technology and labour marketpolicy that were intended to enhance the strategicadvantages of West German capital on the worldmarket. During the post-1989 period, however, theRhine model of capitalism has been subjected to

unprecedented pressures, as manifested, forinstance, in rapidly escalating unemployment levels,rising income polarization, declining labourproductivity, increasing product stagnation and themassive public expense (about $100b a year)incurred through German reunification (Mahnkopf,1999; Streeck, 1997). The latest thrust of global andEuropean economic integration has further erodedpopular support for the inherited Rhine model ofsocial capitalism in Germany, leading to the

aggressive mobilization of new deregulatoryinitiatives, not only by Free Democrats (FDP) andChristian Democrats (CDU) but also, notably, bycentrist Social Democrats as well.

In a recent pessimistic assessment, Streeck (1997)has argued that these trends signal the impendingexhaustion of the Rhine model: the inherited systemof social capitalism, Streeck suggests, cannot survivethe triple challenges posed by German reunification,

European integration and globalization. L ikewise,




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according to Alberts (1993) widely discussedanalysis of capitalism against capitalism, the high-

performance, quality-competitive and innovation-based model of industrial growth associated withthe Rhine model has become increasinglyunsustainable: it is likely, he argues, to be modifiedinto some version of an AngloAmerican modelemphasizing cost-based forms of inter-firmcompetition and a minimalist welfare state.

It is in this political-economic context that thepost-unification Standortdebate must be situated.

As Mahnkopf (1999: 150) notes, all the majorGerman political parties from the FDP and theCDU to the SPD and the Greens have framed thedebate on globalization almost exclusively in termsof the competitiveness ofStandort Deutschland(Germany as an economic location). Disagreementsfocus pr imarily on which strategy is consideredmost appropriate for ensuring economic compet-itiveness rather than on the relative importance ofthis priority or on the divergent ways in which it

might be interpreted (Hirsch, 1998). Whereas thebackers of the Kohl coalition emphasized costreduction measures, more flexible employmentconditions and a rolling back of various socialservices and tax laws, the more recent proposals ofthe SPD and the Greens amount to a milderversion of the same policy in which cost reductionstrategies are to be balanced by an enhancedemphasis on product and process innovation

strategies (Mahnkopf, 1999: 1503). The agenda ofthe current RedGreen coalition under Schrderclosely approximates this latter position whilenonetheless aggressively promoting a number ofderegulatory projects in areas such as labour marketpolicy, welfare policy and social security (Hickel,1999; Hirsch, 1998).13

Recent critical scholarship on the politicaleconomy of deregulation has effectively dismantledthe neoliberal myth that deregulation leads, in

practice, to a rolling back of state power and to anunleashing of market relations unencumbered bylegal, political and institutional constraints (see, forinstance, Altvater and Mahnkopf, 1995; Gill, 1995;Hollingsworth and Boyer, 1997; Rttger, 1997;Snyder, 1999; Vogel, 1996). From this perspective,the relatively familiar, ideological aspect ofderegulation the project of lifting or abolishing government regulations on a range of economic

activities in order to allow markets to work more

freely, as in classical capitalist economic theory(Cerny, 1991: 173) entails, in practice, a shifting of

the tasks and burdens of regulation to newinstitutional sites that are coordinated by the stateyet largely insulated from public scrutiny anddemocratic accountability (Duncan and G oodwin,1988; Gill, 1995; Overbeek and van der Pijl, 1993).The contemporary deregulation movement bothin Germany and elsewhere in the world economy can thus be reinterpreted as a constellation ofhistorically specific political strategies to redefine

the nationally organized institutional spaces thatpredominated under FordistKeynesian capitalismin favour of transformed configurations of statepower that systematically privilege the interests oftransnational capital and the most internationalizedfactions of the domestic bourgeoisie.14 The politicsof actually existing neoliberalism, in other words,entail less the rolling back of the state and therolling forward of the market than the mobilizationof relatively unaccountable state institut ions to

promote intensified commodification, corporatewelfare and publicly financed capital accumulation.

The key issue for the present analysis, however,is the distinctively geographical form in which thecontemporary debate on Standort Deutschlandhasbeen articulated. As Hickel (1998) notes, theStandortdebate in Germany has provoked a kind oflocational hysteria (StandortWahn) in whichpolitical and economic actors at nearly every level of

the state have become obsessed with the structuralcompetitiveness of their territorial jurisdictionsrelative to other European and global locations.However, even in the midst of this apparentlocational hysteria, certain determinate scales ofpolitical and economic organization have beenprivileged in the Standortdebate, in particular, the

European scale of interspatial competition and theregional scale of locational competitiveness.

On the one hand, the mobilization of locational

policy in post-unification Germany has occurred inclose conjunction with the latest round of Europeaneconomic integration, which has underminedvarious national regulatory functions that werepreviously monopolized by central governments(such as the regulation of trade and monetary flows)while simultaneously intensifying competitionamong subnational locations within the EU toattract mobile forms of capital investment. On the

other hand, as Lipietz (1994: 36) remarks, the




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current neoliberal counter-revolution has alsoentailed a reshuffling of the hierarchy of spaces

associated with FordistKeynesian forms ofregulation and, concomitantly, the mobilization ofnew institutional arenas, such as regions and cities,as breeding grounds for the development of newproductive forces. As in many other European states(see Brenner, 1998a; Jones, 1999; Jones andMacLeod, 1999; Keating, 1997; Sharpe, 1993), thisongoing reterritorialization and re-scaling of statepower in the German context has occurred above all

with reference to the regional scale, which isincreasingly promoted by dominant political andeconomic actors and organizations as the engine ofnational industrial growth and as the natural basisfor economic competitiveness within an integratedEuropean space-economy.15

In post-unification Germany, the Standortdebate has served as one of the major political andinstitutional catalysts for implementing these re-scalings of state spatiality. While the national

economy, Standort Deutschland, remains a majorgeographical target for important forms oflocational politics in the FRG, its meaning is beingqualitatively redefined in the context ofcontemporary regionalization tendencies. As wehave seen, a heterogeneous array of political andeconomic interests crystallized around theneocorporatist regionalization projects of the 1980s.However, the regionalization strategies of the 1990s

have been moulded decisively by neoliberalsociopolitical forces, including, above all: prominentmarket-liberal local, Land and national politiciansand bureaucratic elites in each of the major politicalparties; major business organizations such as theGerman Association of Industry and the GermanConfederation of Employers; a host of right-wing,neoconservative and boosterist think-tanks, researchinstitutes and newspapers which play a major role ininfluencing public debates on socio-economic

policy; major local and regional rentiers; and diverseauthoritarian-populist and nimbyist (not in mybackyard) political alliances among various sectorsof the bourgeoisie and working classes in many ofthe major western Lnder and city-regions (seeBischoff et al., 1998; Herkommer, 1998; Hirsch,1998; Plehwe and Walpen, 1999; van der Wurff,1993). For these loosely overlapping constituencies,which together constitute a powerful if unstable

political alliance in the current conjuncture of

German economic development, the regional scaleis increasingly viewed as the key institutional arena

in which modernizing strategies of societaltransformation may be pursued to outflank thesupposed reform inert ia (Reformstau) of existingstate bureaucracies.

Lipietz (1994: 345) refers to those scales ofpolitical and economic organization that emerge asprivileged loci for accumulation strategies and forregulatory experimentation asprojected spaces.Projected spaces can be understood as the territorial

expressions of sociopolitical strategies: they entailboth the delineation of a spatial arena in which aparticular political project is to be pursued and ahegemonic vision (Zukin, 1991) as to what itssocial and ideological content should be. Below Iexplore two key arenas of regional policy in whichneoliberal projected spaces are currently beingconstructed in the FRG:

1. The regionalization of spatial planning policy. In

this policy arena, the G erman central state isattempting to rechannel the productive forces intothe most internationally competitive urban regionsand industrial districts. New, highly technocraticprojected spaces are thus being constructed asregulatory armatures (Lipietz, 1994) for thegeographical concentration and enhancement of theproductive forces.2. The debate on competit ion federalism and fiscal

equalization. In this policy arena, the GermanLnder are competing aggressively for their ownshare of tax revenues and central state subsidies.New projected spaces are thus being constructedthrough a terr itorial politics in which Germanysmost prosperous regions are attempting to minimizetheir fiscal linkages to declining, rustbelt regionswithin the national territory.

The unifying, specifically neoliberal features of

these otherwise divergent political-geographicalstrategies are: their one-sided privileging ofcapitalist growth, in the form ofStandortpolitik,over other sociopolitical goals; their aggressivepromotion of interspatial competition forinvestments and jobs between subnationaladministrative units both within and beyond thenational territory; and, most crucially, theirtreatment of uneven geographical development

within the national space-economy as the natural




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basis for capitalist expansion rather than as hadbeen the case under the Rhine model until the late

1980s as a limitor barrierto economicdevelopment. In this sense, above and beyond itsinherently productivistic logic and its deregulatoryagenda of cost-cutting and institutional erosion(Lipietz, 1994), the spatial essence of neoliberalismat any geographical scale is arguably the politicalproject of intensifying interspatial competition,uneven development and territorial inequality ratherthan of alleviating or overcoming the latter (see

Allen et al., 1998; Amin, 1998; Brenner, 1998b;Spacelab, 1997).16

Neoliberalism with a technocratic face: theregionalization of spatial planning

How shall we organize the spatial structures of ourcountry so that they . . . secure economic

competitiveness for this location (Standort) relative toother locations (Standorten) in Europe and the world?This is the central question, and it will be posed moreexplicitly as the process of globalization cont inues.(Klaus Tpfer, Federal Minister of Spatial Planning,October 1997; quoted in Tpfer, 1998: 19; italics added)

This neoliberal project of promoting renewedeconomic growth through an intensification ofinterspatial competition and uneven geographical

development has been pursued aggressively sincethe early 1990s in the field of national spatialplanning (Raumordnungspolitik). In contrast to thetraditional redistributive and compensatory agendasof spatial planning that prevailed in the FRGroughly from the mid-1960s until the mid-1980s,during the 1990s the issues of locational politics andnational economic competitiveness gainedincreasing centrality to all major policy debates onthe goals, instruments and targets of spatial

planning. In this context, under the directorship ofthe christian democratic minister Klaus Tpfer, thenotion of endogenous regional growth became thelynchpin of German spatial planning. However, inmarked contrast to the politics of deregulation inthe F RG, which have frequently been a topic ofintensive debate in the public sphere, this form ofneoliberal politics has been mobilized in a techno-cratic manner, pr imarily by bureaucratic managers,

urban and regional planners and economists

working in the Ministry of Spatial Planning,Construction and Urban Development in Bonn.

Although the legal and institutional mechanisms ofspatial planning have important ramifications for thegeographies of public spending and infrastructuralinvestment, this policy field has remained largelyinsulated from public debate in the FRG. For thisreason, post-unification spatial planning in the F RGmay be characterized as an arena of neoliberalpolitical strategy with a technocratic face: herenational state agencies are imposing new forms of

locational politics, competition-oriented policy andpublicprivate interaction from above uponstrategic urban and regional spaces.

The turn towards a neoliberal project ofregionalization in the field of spatial planningbecame evident immediately after Germanreunification, though hints of this impendingrealignment had already emerged during the secondhalf of the 1980s.17 In the wake of the explosion ofthe Standortdebate following reunification, a

systematic redefinition of national spatial planninggoals and policies was swiftly put on the agenda bythe central government. First, the new planningframeworks introduced during the 1990s haveemphasized the regional scale rather than thenational economy as the most crucial geographicaltarget for spatial planning policies. Second, incontrast to the earlier focus on the equalization ofindustrial growth and the overcoming of spatial

disparities within the national terr itory, since the1990s the question of economic competitiveness hasbecome the central focus of national spatialplanning. In this sense, spatial planning has beenredefined into an instrument of competitivenesspolicy rather than being seen as a compensatorymechanism for managing the polarizing socio-territorial effects of industrial growth. T hird, underthese circumstances, the traditional notion of anequalization of life conditions, which had long

been the lynchpin of West German spatial planning,has been radically redefined. Although the issue ofsocio-territorial equalization remains central to thepractice and ideology of spatial planning, it has beenredefined during the last decade to be renderedconsistent with the federal governments newpriority of enhancing the productive forces of majorurban regions and industrial districts. In these ways,the current Standortdebate has been closely

intertwined with a major reorganization of the




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frameworks that have underpinned spatial planningin the FRG since the mid-1960s.

These shifts were first signalled in the SpatialPlanning Report of 1990, which contained an entirechapter on the question of Germanys internationaleconomic competitiveness an issue that had neverbeen mentioned in previous Spatial PlanningReports (the immediately previous one waspresented in 1986). In addition to this new,prominent emphasis on economic competitiveness,the 1990 Spatial Planning Report analysed national

economic productivity with reference to the specificlocational features of its major urban regions. In thiscontext, the notion of regional competitivenesswas introduced and operationalized with referenceto nine empirical indicators in each of Germanysmajor metropolitan agglomerations (DB, 1990:1748). This reorientation of spatial planning waselaborated in greater detail in the next SpatialPlanning Report of 1993, in which the massivepolarization between the older states of western

Germany and the new, eastern states was system-atically thematized and analysed. In this context, thegoal of securing equal living conditions wasexplicitly redefined: first, in terms of regionalrather than national minimal standards; andsecond, as a differentiation rather than as a homo-genization of national territorial space. In describingthe goals of national spatial planning, the authors ofthe 1993 Report attempted to clarify this somewhat

paradoxical redefinition of spatial equalizationthrough a distinction between equivalence(Gleichwertigkeit) and uniformity (Gleichartigkeit):

The equivalence (Gleichwertigkeit) of living conditionsshould not be confused with their uniformity(Gleichartigkeit). Enough room for manoeuvre(Spielraum) must be maintained to enable differenttrajectories as well as initiatives from below(Eigeninitiativen) . . . The state cannot guarantee anequalization in all areas, but can merely provide

assistance for investments and initiatives particularly inthe realm of infrastructure which favour self-reliantregional development. (DB, 1994: 2)

Elsewhere in the 1993 Report, this new emphasison regional potentials and endogenous capacitiesand on regional locational conditions(Standortbedingungen) was reiterated as one of theoverarching goals of national spatial planning (DB,1994: 5). The balanced growth of national economic

space was thus now viewed as a task of promoting

regionally specific developmental trajectories ratherthan as a problem of spreading growth from core

regions into the lagging peripheries. Theequalization of life conditions was now to besecured by creating the political-economicconditions for intensified regional specialization andterritorial differentiation instead of, as hadpreviously been the case, by attempting to replicatecertain basic infrastructural conditions and publicservices throughout the national territory.

The justifications for these policy adjustments

were elaborated in greater detail in two major spatialplanning documents presented by the GermanDepartment of Spatial Planning, Construction andUrban Development during the 1990s: theFramework for Spatial Planning Policy Orientation(Raumordnungspolitischer Orientierungsrahmen ORA) of 1992; and the Framework for SpatialPlanning Policy Implementation (Raumordnungs-

politischer Handlungsrahmen HRA) of 1995. In thenew policy frameworks introduced through these

documents, regions are defined as the most cruciallevel of policy implementation for the major spatialplanning tasks (BMBau, 1993; 1995). According tothe ORA, a regionalization of spatial planning isneeded urgently because regions are today theessential geographical basis for securing nationaleconomic competitiveness: The major urbanregions ... are the regional growth engines for thespatial development of the national territory as a

whole (BMBau, 1993: 6). A strengthening ofendogenous regional capacities is thus viewed asthe appropriate means under contemporarycircumstances to enhance the competitiveness ofGermany and its regions as investment locations(BMBau, 1993: 13). T he HRA reinforces thisregional emphasis with reference to the sameconstellation of priorities and delineates sixEuropean metropolitan regions Berlin-Brandenburg, Hamburg, Munich, Rhine-Main,

Rhine-Ruhr and Stuttgart as the engines ofsocietal, economic, social and cultural development(BMBau, 1995: 279).

In addition to their emphasis on regional formsof spatial planning, the ORA and the HRA advocateintensified cooperation within the major G ermanurban regions as an essential prerequisite forimproving their competitive advantages on supra-regional scales: On a European scale, it is no longer

individual cities which compete against one another,




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but entire regions; consequently, the competitionof the regions within the European Single Market

demands ... the construction of differentiatedlocational capacities, which are in turn only possiblethrough intensified intraregional cooperation(BMBau, 1993: 7, 13). A recent summary of theprojects introduced through the ORA and the HRAlikewise draws attention to the ways in whichinitiatives have already formed in a few Germanregions to take their destiny in their own hands inorder to ... exploit endogenous potentials (BMBau,

1996: 12). In this conception, then, the mobilizationof endogenous growth potentials entails not only adevolution of tasks and responsibilities from thecentral state to the regions, but also the introductionof new mechanisms of cooperation that force majorinstitutions and actors within metropolitan regionsto coordinate their activities.

Crucially, these new strategies of endogenousregional development are being advocated not onlyin the major urban agglomerations, but also in less

densely urbanized regions. To this end, the ORAand the HRA introduce an approach to regionalplanning which complements the traditionalChristallerian notion of central place hierarchieswith that of city-networks (Stdtenetze). The goalof the city-networks project is to bundle theproductive capacities of smaller and middle-sizedcities together to constitute regionally organizedframeworks for infrastructure investment, economic

planning and industrial growth. This bundling ofindividual cities into regionally configured networksof cooperative planning is seen as a strategy tosecure the competitiveness of Germany and itsregions as investment locations (BMBau, 1995: 13).In this framework, the classical Fordist oppositionbetween urban regions and rural peripheries isreplaced by the project of differentiating nationaleconomic space among highly specialized urbanizedregions, each with its own unique locational

advantages, institut ional structure anddevelopmental trajectory.

Taken together, these policy realignmentsrepresent the most comprehensive reconfigurationof spatial planning in the FRG since theintroduction of the first Spatial Planning Law in1965. In essence, spatial planning in post-unificationGermany is being transformed from a system ofpolicies for alleviating uneven geographical develop-

ment into a framework that actively intensifies it by

promoting the continued recentralization of growthwithin specialized core urban regions. Subnational

regions in particular, the Lnder, metropolitanagglomerations and inter-city networks ratherthan the national economy have become the keygeographical targets for spatial planning policies.Meanwhile, economic competitiveness rather thansocio-terr itorial cohesion (Ausgleich) has become thecore priority for such policies. T his fundamentalreversal is made most explicit in the ORA, whichargues, in one truly hairsplitting formulation, that

the alleviation of spatial inequalities can only berealized in the long term through the concertedpromotion of self-reliant regional trajectories(BMBau, 1993: 21).18

Under these circumstances, the postwarFordistKeynesian project of homogenizing spaceon a national scale is being superseded by nationalspatial planning strategies oriented towards theredifferentiation of national space among distinctregional economies, industrial districts and urban

growth poles. The postwar project of nationaleconomic development, based upon the attempt toreplicate basic socio-infrastructural conditionsthroughout the national territory, is today beingsuperseded by what might be termed a glocaldevelopmentalist project, based upon strategies toenhance global competitive advantages bysplintering national economic space among highlyspecialized regional and local economies (Brenner,

1998a; Swyngedouw, 1997). In the new version ofthe ROG approved by the federal government in1997, the priority of constructing the locationalpreconditions for economic development wasintroduced as one of the legally binding goals ofnational spatial planning.19 The issue of enhancingthe productive force of urban and regional space hasthus become a core concern of German spatialplanning, in contrast to the classical problem ofovercoming intra-national forms of spatial

polarization. In short, intra-national unevendevelopment now understood in terms of regionalspecialization and terr itorial redifferentiation istoday viewed as the geographical basis for nationalcompetitiveness rather than as a hindrance, barrieror limit to industrial growth. In this sense, duringthe post-unification period, national spatialplanning has become an important politico-institutional arena for the elaboration of neoliberal

projected spaces at regional scales.




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subsidize economic growth within the poorerLnder, the doctrine of competition federalism has

entailed a direct attack on the principles of nationalsociospatial solidarity and national spatialequilibrium upon which the Rhine model wasgrounded (Jeffery, 1999; Mackenstein and Jeffery,1999).

The tur n towards competition federalism wasfirst signalled during the process of reunification asa major debate erupted regarding the appropriateterritorial borders for the Lnder within the newGermany. This issue has been a topic ofintermittent discussion and debate throughout thehistory of the FRG (Schiffers, 1995). However,whereas previous rounds of this debate in the mid-1950s and mid-1970s focused predominantly uponthe need to promote an equalization of lifeconditions and administrative efficiency on anational scale, post-unification proposals toreorganize Land territorial structures haveemphasized, above all, the role of state institutions

in promoting regional structural competitiveness,particularly in major urban regions (Brenner andHeeg, 1998).21 This priority became most apparentin a series of bitterly contested proposals presentedin the mid-1990s to fuse the Lnder of Berlin andBrandenburg, as well as in various attempts toabolish the city-states of Bremen and Hamburg andto reconfigure the borders of Lower Saxony andSchleswig-Holstein. The same issue was alsoarticulated, if less prominently, in discussions of theadministrative fragmentation of the Frankfurt/Rhine-Main region by Land borders during themid-1990s.

Despite its high profile in German politicaldiscourse throughout the 1990s, these debates onthe territorial redivision of Land borders did notlead to modifications of existing structures of Landterritorial organization. Although these debates arestill occasionally reignited in the city-states of

Hamburg and Bremen, the major proposals for aterr itorial redivision of the Lnder were shelvedfollowing the failure of the Berlin-Brandenburgfusion in a referendum held in both Lnder in 1996.The essential point in the present context is theunprecedented prominence that was attributed tothe priorities of global structural competitivenessand endogenous regional growth in short , toStandortpolitik by all major participants in thesedebates. Meanwhile, a range of regional industr ial,

technology and planning policies continue to bearticulated by the Lnder to position their regional

and urban economies strategically within Europeanand global circuits of capital (Bade, 1998; Benz etal., 1999). As Esser and Hirsch (1994: 86) observe,The adaptation to world market conditions and theassurance of international competitiveness remainsthe unquestioned imperative of the industrial policyof eachLand.

Recent debates on the Fiscal EqualizationMechanism (Lnderfinanzausgleich FEM) providethe clearest indication that a new form ofcompetition federalism is being art iculated in theFRG (Jeffery, 1999). T he FEM is a redistributorypolicy through which the wealthier Lnder arerequired to transfer substantial revenueshorizontally to the poorer Lnder: it is the majorfederal policy mechanism through which uniformlife conditions (einheitliche Lebensbedingungen) arepromoted in accordance with Article 107 of theGerman Constitution. Currently, the five wealthiest

Lnder (Hesse, NRW, Bavaria, Baden-Wrttembergand Hamburg) transfer about DM12b annually tothe 11 other Lnder. Although the structure of theFEM has long been a source of conflict bothvertically, between the centr al state and the Lnder,and horizontally, among the Lnder themselves,during the 1990s a new round of conflicts regardingthe FEM erupted in the context of the Standortdiscussion. T hese struggles over the FEM wereinitially triggered by the question of how toreconcile the constitutional requirement ofpromoting uniform life conditions with the massivesocio-economic disparities between the older statesof West Germany and the new, peripheralized statesof East Germany.22 Although this latter issue wasaddressed primarily through the introduction ofvarious special federal programmes such as theGerman Unity Funds, it soon led to a more generaldebate on the future organization of the FEM

within the German federal system under thetransformed political-economic conditions of the1990s.

Whereas the weaker, monostructural Lnder ofeastern and western Germany have generallysupported a continuation of the FEM in itsinherited form, the most prosperous andeconomically diversified Lnder of westernGermany such as Bavaria, Baden-Wrttembergand Hesse have mobilized a concerted critique of




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the F EM and advocated greater autonomy and self-reliance for all the Lnder.23 The christian

democratic governors of Baden-Wr ttemberg(Erwin Teufel), Bavaria (Edmund Stoiber) and most recently Hesse (Roland Koch) have beenparticularly vocal advocates for a comprehensivereform of the FEM that would enhance the fiscalautonomy the Lnder and minimize fiscalredistribution among them: they have recently fileda series of legal complaints against the currentstructure of the FEM in the German SupremeCourt.24 The project of instituting a new model ofcompetition federalism has also been promotedthrough various prominent German policy institutes,foundations and research commissions, such as theGerman Institute for Economic Research, theCommission for the Reform of the Social MarketEconomy, the Future Commission of Bavaria andSaxony, the Friedrich-Ebert-Stiftung (sponsored bythe SPD) and the Friedrich-Naumann-Stiftung(sponsored by the neoliberal FDP). The reports and

policy recommendations of these organizations havebeen discussed and debated prominently in theGerman news media.

A decade after reunificiation, the future of theFEM remains uncertain; legal battles over the issueare likely to intensify. It is nonetheless instructive toexamine the critique that has been articulatedagainst the FEM by the proponents of competitionfederalism, for their positions have decisivelyredefined the assumptions and priorities in terms ofwhich public debates on the FEM have been framedthroughout the last decade. According to a recentreport of the German Institute for EconomicResearch, the essence of competition federalism is:

. . . a rejection of the priority of overcoming [national]spatial disparities (Ausgleichspolitik) in favour of astronger emphasis on growth politics (Wachstumspolitik).The goal must not be a convergence or uniformity of life

conditions but rather a diversity of regional lifeconditions (regionale Vielfalt der Lebensverhltnisse) . . .The promotion of uniform life conditions should notbe pur sued as a corrective to market processes. Rather, itshould occur through the process of competition inwhich each region promotes its comparative advantages.This model is based not upon cooperative federalismbut on competition oriented (wettbewerbsorientierter)federalism. (DIW, 1996: 85)

As in the previously discussed realignment of

national spatial planning, the model of competitionfederalism redefines the goal of territorial balance,

orAusgleich, to privilege: (a) the regional rather thanthe national scale; (b) market-mediated competitionbetween regions rather than state-mediated financialtransfers or subsidies; and (c) an increasingdifferentiation of national terr itorial space ratherthan its homogenization through the replication ordiffusion of regional economic growth patterns. Inthis manner, the Lnder are to be transformed intoadministrative containers of endogenous economicpotentials rather than operating as subnationalterr itorial components within a nationallycoordinated administrative hierarchy or space-economy. From this perspective, the project ofestablishing equal life conditions between regions ona national scale must be superseded by strategies topromote endogenous growth potentials withinregions, independently of their relations to oneanother within national political space. Jeffery(1999) aptly describes this realignment as a Sinatra

Doctrine of theLnder in which each Land ispressed to go its own way in providing the socio-economic preconditions for external capitalinvestment and growth. As Jeffery (1999: 332)indicates, Money does indeed talk, and currentlydoes so rather more loudly than the old ethos offinancial solidarity.

In general terms, the proposed model ofcompetition federalism can be viewed as a strategyto integrate policies oriented towards mobilizingendogenous regional growth potentials within afederalist administrative framework in which inter-regional inequality has traditionally been construedas being both politically unacceptable andeconomically dysfunctional. To this end, theproponents of competition federalism argue that thenotion of terr itorial equalization (Ausgleich), one ofthe ideological centrepieces of German federalism,must be thoroughly redefined in terms of the notion

of regional self-reliance (Eigenstndigkeit).According to Kurt Biedenkopf, the currentgovernor of Saxony, intra-national inequality can beviewed as a problem only to the extent that regionsare actually compared to one another (Biedenkopf,1992).25 In Biedenkopf s view, therefore,regionalization policies must attempt to differentiateregions from one another and thereby to reduce thecoherence of such inter-regional comparisons.Biedenkopf suggests that regionalization policies are




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currently necessary because they facilitate a greaterpopular acceptance of sociospatial polarization and

territorial inequality within the German politicalsystem. As Biedenkopf argued in a 1992 speech:

The constitutionally binding goal should not be tosecure equal (gleiche) life conditions, but rather toestablish comparable (vergleichbarer) life conditions ...Large-scale inequalities are only politically acceptablewithin a federal system when the different unitsdemonstrate a certain independence (Selbststndigkeit).They must possess a clear identity, an identity whichreduces the comparability among regions and thereby

makes easier an acceptance of such inequalities (eineIdentitt, die die Vergleichbarkeit der Regionen reduziert

und es damit leichter macht, Ungleichheiten zu akzeptieren).Thus an emphatic (betonte) policy of regionalization is aprecondition for a greater inequality among theLnder.(Biedenkopf, 1992: 634)26

A closely analogous formulation appears in thewidely discussed Report of the Future Commissionof Bavaria and Saxony: to the extent that a

regionalization of social policies strengthens thedifferences between the Lnder, the Report argues,this should not only be accepted, but instru-mentalized for competition (cited in Bergmann,1998: 339). In this framework, then, the meaning ofspatial disparities within the national territory hasbeen systematically inverted: uneven developmentbetween Lnder, regions and cities is no longerviewed as a hindrance to national economicdevelopment but rather as its very foundation.

The goal of competition federalism is thus toforce each Land to promote itself as a unique, self-propelled territorial arena for economic growthwithin the European and world economies ratherthan to alleviate spatial disparities or to establishsocial cohesion on a national scale federalcompetition instead of distributional conflicts inone prominent recent formulation (Ottnard andLinnartz, 1997). Competition federalism is based

upon a neoliberal doctrine of self-reliance(Eigenverantwortlichkeit) in which regions are viewedessentially as spatial analogues to individuals in neo-classical economics that is, as profit-maximizing,self-interested units interacting through marketcompetition. Insofar as financial transfers from thecentral state or from other Lnder alleviate thepressures of market competition, it is argued, theyundermine the ability of regions to promote theirown unique locational advantages (DIW, 1996: 87).

This tendency towards desolidarization (Jeffery,1999) is the ideological core of the critique of the

FEM that has been art iculated by the advocates ofcompetition federalism: redistributive spatialpolicies are increasingly said to block economicrestructuring within weaker, recipient regions whilesimultaneously undermining economic expansionwithin stronger, economically self-sufficient regions.

In the present context, the crucial pointregarding the current debate on the FEM is its keyrole within a growing political movement todismantle the system of cooperative federalism thatprevailed in the FRG throughout the 1980s byredefining the Lnder into institutional containersof endogenous regional growth potent ials. AsJeffery (1999: 340) indicates:

Cooperative federalism is being undermined by newpatterns of pursuit ofLnderself-interest anddiminishing cross-Lndersolidarity. T his does notnecessarily mean that theLnderare thrustingthemselves into unbridgeable conflict with one another

at the expense of the whole post-war tradition ofcooperative federalism. What it does mean is a rathermore fluid and differentiated set of interactions withinwhich shifting coalitions ofLnderwill form aroundspecific issues. This might be t ermed a Sinatra doctrineof theLnder, with eachLanddoing it my way,sometimes with, sometimes without the support of theothers.

Consequently, much like the entrepreneurial citiesthat emerged throughout the FRG during the

second half of the 1980s, the German Lnder of the1990s interact increasingly as hostile brothers,flinging themselves into the competitive process ofattracting jobs and investment by bargaining awayliving standards and regulatory controls (Peck andTickell, 1994: 281).

The preceding discussion reveals various ways inwhich the German federal system is currently beingredefined in conjunction with the contemporary

debate on Standort Deutschland.27 The so-calledSinatra doctrine of the Lnder has articulated notonly a new framework of intergovernmentalrelations but a specifically neoliberal approach tonational socio-economic governance in whichGermanys local and regional economies are beingleft to their own devices in promoting industrialgrowth and in managing internal sociopoliticalconflicts. Competition federalism thus represents animportant political mechanism through which a




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neoliberal project of regionalization groundedupon the active promotion of interspatial

competition for investments and jobs betweensubnational hostile brothers is being mobilized inpost-unification Germany.

In the era ofStandort Deutschland, theFordistKeynesian goal of establishing equalizedlife-conditions at a national scale is increasinglybeing portrayed by dominant political and economicactors as a quaint relic of a bygone golden age inwhich industrial growth, class compromise andsocio-terr itorial redistribution proceeded hand inhand across the national territory. Meanwhile, undercontemporary conditions, new regional institut ionalinfrastructures are being consolidated in order toinstitutionalize neoliberal political agendas. TheEuro-regions analysed above must thus be viewed askey projected spaces in and through which thecurrent neoliberal offensive is being articulated inpost-unification Germany.

Conclusion: regionalization as a strategy ofcrisis-management?

This article has traced various ways in which thenationally focused framework of state spatialitywhich underpinned the Rhine model of Germancapitalism has been systematically reconfiguredduring the post-unification period. As we have seen,many of these changes were initiated during the1980s, under the Kohl regime, in the form ofdiverse policies oriented towards promotingendogenous growth potentials, intensifiedinterspatial competition and an increasingly self-reliant role for municipal institutions. While manyof the policies of this era were significantlyinfluenced by neoliberal political agendas, otherswere art iculated in direct opposition to the latter

insofar as they privileged neocorporatist prioritiessuch as redistribution, social cohesion, classcompromise and local democracy over theproductivist goals of economic growth andstructural competitiveness. During the 1990s,however, the politics of endogenous developmentwere integrated directly into the broader neoliberalproject of deregulation, institut ional erosion andaggressive interspatial competition that has beenassociated with the Standortdebate. The traditional

goal of promoting an equalization of livingconditions throughout the national territory has

been systematically reformulated to emphasize thedistinctiveness of regional and urban economies assites for external capital investment. Concomitantly,the project of promoting a homogenization ofnational territorial space through the replication ofbasic socio-economic and infrastructural conditionshas been systematically inverted: in the post-unification period, the redifferentiation of nationalspace among distinctive regional and localeconomies is increasingly viewed as the geographicalfoundation for national competitiveness. Whereasthe priority of equalization remains a constitutionalrequirement within the German federal system, thepreceding analysis has suggested that theFordistKeynesian project of promoting nationalspatial solidarity is being subordinated to, orreformulated in terms of, the politics of local andregional economic growth, administrative self-reliance, and structural competitiveness. In essence,

then, the political geography of neoliberalism inpost-unification Germany is based upon a logic ofintensifying inter-organizational competition andintra-national uneven geographical developmentrather than a nationalizing politics of solidarity,redistribution or socio-territorial equalization.

These transformations have been explored herethrough the lens of recent realignments within thenational spatial planning system and within theframework of German federalism, but they aremerely two among many dimensions of the complexreterr itorializations of state spatiality that arecurrently unfolding in contemporary Germany andelsewhere in the EU. In each case, as I havesuggested, a major goal of national and Landpolicymakers has been to construct Euro-regionsendowed with place-specific socio-economic assetsand oriented aggressively towards interspatialcompetition against other European cities and

regions. In each instance, moreover, a re-scaling ofstate institutions and policies is seen as an essentialmeans for delineating and strengthening such localspaces of global accumulation. Analogous, ifpolitically contested, tendencies towards Euro-regionalization are being articulated throughout theEU, as European national states struggle to promotetheir most powerful global city-regions andindustrial districts as uniquely competitive locationswithin an integrated European space-economy. T he




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political and institut ional dynamics of these re-scalings of state power are now being directly

investigated in a variety of national and regionalcontexts, but scholars have only just begun toconceptualize their potentially dramaticramifications for the future of statehood on theEuropean continent and beyond (Jessop, 1997a,1997b; Jones, 1998; MacLeod, 1999; Scott, 1998).

In direct contrast to the neoliberal ideology ofless state, more market, this analysis hasemphasized the ways in which the practice ofneoliberalism in the FRG has entailed a complexgeographical reconstitution of state regulation withreference to new strategic spaces, territories andscales (see also Eisenschitz and Gough, 1996). It isin this context, I have suggested, that theconstruction of Euro-regions and other neoliberalprojected spaces in post-unification Germany mustbe conceptualized. T hroughout the history of theFRG, there has long been an extremely complexsystem of interdependencies and legal/ financial

relays between the federal government and theLnder. In the current era, this system is beingdramatically recalibrated through the manoeuvres ofthe central state and the most powerful Lnder torejuvenate and rechannel industrial growth intostrategic territorial locations. The current round ofstate re-scaling in the FRG thus represents not theerosion or rolling back of national state power butrather its reterritorialization into a transformed,glocalized spatial configuration in which, as NicosPoulantzas (1978: 213) presciently noted over twodecades ago, the central state designates particularregions as development areas to the detriment ofcertain others. The construction of Euro-regionswithin Germany and other European national statesmust be viewed as a key medium in and throughwhich this neoliberal reterritorialization of statepower is being pursued.

It remains to be seen whether the emergent

regional projected spaces associated with the currentneoliberal offensive in the FRG foreshadow a long-term regulatory solution to the deepening crisis ofthe Rhine model of German capitalism or represent,rather, merely short-term adjustment strategies thatserve to perpetuate or even exacerbate this crisis.T he analysis developed here suggests thatcontemporary regionalization tendencies in theFRG most closely approximate a series ofuncoordinated crisis-management strategies

through which neoliberal political alliances areattempting, above all, to redistribute both the

productive forces and the social surplus amongcompeting administrative units and ter ritoriallocations within the German state hierarchy.However, because it adopts a chronically short-termist agenda of beggar thy neighbour andheightened inter-organizational competition, thisneoliberal politics of competitive redistributionfails, fundamentally, to address the basicsociopolitical and institutional causes of economicstagnation withinModell Deutschland. Mostcrucially, these neoliberal strategies ofregionalization are internally contradictory insofar asthey intensify uneven development, underminesociopolitical cohesion and severely compromise thelong-term conditions for socio-economicdevelopment at once on local, regional and nationalscales (Eisenschitz and Gough, 1996; Peck andTickell, 1994). For these reasons, it appearsextremely unlikely that the neoliberal forms of

regionalization that have been mobilized withinpost-unification Germany could provide thepolitico-institutional foundations for a stabilizednational model of economic development, politicalregulation and class compromise following the crisisofM odell Deutschland. Indeed, the politics of neo-liberal regionalization in the FRG may well herald acentrally induced fragmentation of the Rhine modelamong regionally specific institutional andindustrial systems engaged in aggressive inter-terr itorial warfare with one another for statesubsidies, jobs and investments.

These considerations suggest, finally, a crisis-theoretical reinterpretation of the institutionalrealignments that are commonly associated with theso-called new regionalism in contemporaryacademic debates (Keating, 1997; Lovering, 1999;Scott, 1998). As this analysis indicates,regionalization tendencies in contemporary

Germany signal neither the self-propelledresurgence of regional economies nor theconsolidation of new, stabilized subnational modesof regulation after the crisis ofModell Deutschland.Rather, the dynamics of political regionalization inpost-unification Germany are best understood asspatial articulations of centrally induced crisis-management strategies: their predominant effect isless to reignite accumulation at any spatial scale thanto hollow out the regulatory infrastructures and




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political settlements of the Keynesian welfare state,which are increasingly viewed as barriers to

economic modernization (see also MacLeod, 2000).We thus arrive at what is arguably the central

geographical paradox of the contemporary debateon Standort Deutschland: despite its concertedemphasis on freeing market forces and unleashingindustrial growth in the context of purportedlyintensified global and European economic competi-tion, the Standortdebatte has served primarily to re

Documents

Brenner N - Building ‘Euro-Regions’ - Locational Politics and the Political Geography of Neoliberalism i