Local government and the bailout: Reform singularities in Portugal

Abstract:

Portugal is working on the reform of its local government. Although amalgamation was one of the recommended strategies, as a consequence of the European Union/International Monetary Fund bailout process, an alternative approach has been suggested. This reform is mostly a development of inter-municipal cooperation mechanisms combined with partial devolution strategies. However, as the bailout agreement was its main catalyst, the urgency to cut public administration costs required in the memorandum and the imposed deadlines gave a perverse incentive for central government to produce ad hoc and fragmented modifications. I argue that these political and economical demands, which sanctioned the argument for rushed measures, together with the country’s strong local identities, historical municipalism, political centralism and the political costs of significant territorial changes, can explain the absence of a comprehensible reform strategy and the singularities of its policies. This article explores the framework that justifies the reform and assesses the impacts of the bailout agreement.