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The rebuilding of public administration in the new German Länder can be described as a process of increasing differentiation. The new states share the common legacy of ‘democratic centralism’ and face similar reform challenges; but the analysis of the establishment of state administrations, local government reform and personnel policy reveals important differences amongst the states. West‐East institutional transfer plays a decisive role in creating effective institutions of governance in the East. However, it does not imply the imposition of a uniform West German ‘model'; rather, institutional transfer encourages administrative differentiation.
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