The reinstatement of 302 parishes, approved by Parliament this month—resulting in a net increase of 167, bringing the total to 3,259 and generating additional costs—will lead to a decrease in the average number of inhabitants per parish from 3,345 to 3,174 by 2025. This represents the 7th lowest ratio of inhabitants per lower-level Local Administrative Unit (LAU) in the European Union (EU), where the median ratio among member states is 7,711 people per LAU, and the average is 16,545 (see Flash analysis).
These figures are highlighted in Flash No. 1 of 2025 by the Economic, Business, and Public Policy Studies Office (G3E2P) of FEP, which shows that if Portugal adopted the EU median ratio, the number of parishes would drop to 1,341. If the European average ratio were followed, only 625 parishes would remain, which would only make sense in the most populous municipalities.
At the same time, Portugal remains one of the most centralised countries in Europe, as reflected in the low share of local and regional public expenditure in GDP, which stood at just 6.5% in 2023—less than half of the EU average (12.7%) and the 7th lowest.
“This FEP analysis demonstrates that the reinstatement of parishes in early 2025 not only generates costs but also runs counter to the trend seen in other European countries, particularly the more developed and efficient ones,” states Óscar Afonso, director of FEP and one of the authors of the Flash analysis. “Portugal also has the 7th lowest share of local and regional expenditure in GDP, confirming its highly centralised nature.” Given these figures, the FEP director argues that “it is easy to see that this centralism results from the absence of administrative regions on the mainland—regions that exist in most EU countries—rather than from a lack of parishes. On the contrary, their number is excessive within the EU context, and this has not led to real gains in decentralisation, as will be the case with the reinstatement of parishes now decided.”
According to the other author of Flash No. 1 of 2025, “the reorganisation of the administrative structure would be even more drastic if we followed the models of more developed and efficient countries, where population ratios per LAU exceed the EU average.” Nuno Torres, head of G3E2P, highlights that “Denmark and the Netherlands, two of the most developed EU member states—with slightly more than half and slightly less than twice the population of Portugal, respectively—record the highest LAU ratios in the EU. They serve as benchmarks for best practices and efficiency in this indicator, with 60,215 and 52,465 people per lower-level LAU, respectively, managing an average of 18 and 16 times the number of inhabitants per Portuguese parish.”
The adoption of the population-to-LAU ratio used in Denmark or the Netherlands—countries that are benchmarks for administrative efficiency in this indicator, as well as for best practices in general, given their high level of development—would result in a number of these units being lower than the current number of municipalities, according to the Flash analysis.
“In this scenario, municipalities would become the main local government bodies, absorbing the responsibilities and resources of parishes, which would cease to be autonomous administrative units. However, their territorial divisions should be preserved in municipal management for historical, cultural, and economic reasons, respecting their unique characteristics and the sentiments of local populations, who simply want their problems resolved efficiently, regardless of the model used,” explains Óscar Afonso. “Moreover, as the number of LAUs resulting from these more efficient administrative models would be significantly lower than the current 308 municipalities, several of the smaller ones should merge. However, a less demanding intermediate scenario could be defined, preserving the current municipalities without requiring mergers,” the FEP director suggests.
The economist and university professor concludes that “abolishing the parish administrative level and creating regions would enable more efficient governance, bringing Portugal closer to best practices. This reform should be discussed when the political situation is more favourable, after the local and presidential elections.”
The analysis highlights that Denmark is simultaneously the EU country with the highest ratio of population per lower-level LAU and the highest share of local and regional expenditure in GDP. Therefore, “Denmark stands out as the best benchmark for best practices in terms of efficiency and decentralisation of public administration in the EU,” states Nuno Torres.
Flash No. 1 of 2025 inaugurates a new format of brief and graphical analysis of relevant current issues by FEP and is available on the G3E2P website.