Markets and Municipalities: A Study of the Behavior of the Danish Municipalities

Henrik Christoffersen and Martin Paldam

Public Choice, 2003, vol. 114, issue 1-2, 79-102

Abstract: The complex pattern of Market Orientation of the 275 Danish municipalities is analyzed. An MO-variable is constructed from a poll covering 12 tasks, where municipalities are free to produce the service or purchase it on the market. Six potential explanations of the MO-pattern are operationalized. Four of those work: (1) MO is a modernization, (2) spreading by diffusion. (3) MO increases if the municipality is under economic pressure. (4) MO stays low if the fraction of the population that depends upon the public sector is large. While stakeholder/pressure group politics thus works, explanations based on ideology/partisanship fail. In the integrated Copenhagen metropolitan area most explanations fail. Copyright 2003 by Kluwer Academic Publishers

Date: 2003
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