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You don't have to disappear to be efficient: two shared-services models from the EU

Merging is not the only solution for small localities. Denmark allowed a mandatory partnership instead of a merger, and Estonia built a shared digital infrastructure for thousands of institutions.

The ROptimizaRE editorial team · 4 min read · updated 15 October 2026

In short

  • In the 2007 Danish reform, municipalities below the 20,000-inhabitant threshold could choose either a merger or a “mandatory partnership” with neighbours that together reached 30,000 inhabitants, without disappearing as separate administrative units[1]
  • Estonia built X-Road, a shared digital infrastructure through which over 900 institutions and companies exchange data daily, without each building its own systems[2]
  • Estonia estimates that X-Road saves over 820 person-years of work annually, but warns that this figure covers only 5% of usage, the rest not being measured[2]

Merging is not the only way

The other topics on this site document the problem: the higher per-resident costs of small administrations, institutions with overlapping remits. This pillar is different: it gathers concrete, documented examples of EU countries that solved similar problems without erasing the local identity of small communities.

Denmark: partnership, not just merger

The 2007 Danish administrative-territorial reform is known mainly for reducing the number of municipalities from 271 to 98. Less well known is that merger was not the only option offered to small municipalities: those below the 20,000-inhabitant threshold could also choose a “mandatory partnership” with neighbouring municipalities, a joint structure that together reached the 30,000-inhabitant threshold, without each partner municipality losing its separate administrative identity[1].

Estonia: one shared digital infrastructure, not thousands of separate systems

Estonia solved a different but related problem: not administrative fragmentation, but the fragmentation of IT systems. Instead of each public institution building its own databases and information-exchange interfaces, the state built X-Road: a shared digital infrastructure through which over 900 public institutions and companies exchange data daily, using a single set of standards[2].

Working time saved annually through X-Road

820 years

Year 2024 · source[2]

Equivalent to 820 person-years of work, for the state and citizens combined, but the official source specifies that it covers only 5% of the queries through the system, those that can be measured directly.

The two examples are not ready-made recipes: context, size and institutions differ. But they show that “efficiency” does not automatically mean “fewer administrative units”: it can also mean shared infrastructure, keeping local identities separate.

Sources

Primary official sources; where we use the press (only when the official document is not public) we mark it. The links lead to the original document or to the report cited (titles are translated; the documents themselves are in Romanian unless stated).

  1. [1]

    Danish Ministry of the Interior and Health (Indenrigs- og Sundhedsministeriet) — The Local Government Reform – In Brief (the exact publication day (December 2005) is not stated in the document; the reform took effect on 1 January 2007)

    Published 1 December 2005 · Accessed 15 October 2026 · the original document(opens in a new tab)

  2. [2]

    e-Estonia (the Estonian Government's official digital transformation platform) — How do Estonians save annually 820 years of work without much effort? (the figures represent only 5% of X-Road queries, which can be measured directly; the remaining 95% are not quantified, according to the source)

    Accessed 15 October 2026 · the original document(opens in a new tab)

This is a translation of the Romanian article, which prevails. Source titles are translated for convenience; the documents themselves are in Romanian unless stated.