The article deals with the territorial reforms at municipal and county government levels which, following German unification in 1990, were carried out in the re-established (five) regional States (Lnder) each of which, according to the German tradition and federal system, has the power to pass legislation on local government institutions as well as territorial structure. Conceptually influenced ('institution transfer', 'institutional isomorphism') by the territorial reform policies that were carried out in the West German Lnder during the 1960s and 1970s, the East German Lnder, after 1990, embarked on a 'carrot and stick' strategy. In a first ('participatory') phase, reform commissions were set up and public hearings held, followed by a ('voluntary') phase during which local governments were given the opportunity to 'voluntarily' agree to the territorial scheme proposed by the Land government. Finally, however, again in line with previous practice in West German Lnder, if such local consent was not achieved, the Lnder decided by binding ('coercive') legislation. In the period immediately after 1990, most East German Lnder refrained from redrawing the boundaries of the multitude of small municipalities. Instead their strategy was largely to retain the latter while, again in a 'carrot and stick' approach, promoting the creation of a layer of intermunicipal bodies meant to operationally support the (administratively inept) small municipalities. Recently, a new round of territorial reforms has opened in most East German Lnder, aimed at establishing territorially enlarged municipalities through mergers and, at the same time, reducing the number of intermunicipal bodies. A main reason for this 'reform of the reform' has been that the very small municipalities have proved politically and economically ever less viable, and that the intermunicipal bodies lack direct democratic legitimacy and have exhibited serious coordination problems and 'transaction' costs