Political Control of Administrative Spending: The Case of Local Governments in Norway

Abstract

Excessive administrative spending in local governments has been a concern in the public debate in Norway. Administration takes resources away from welfare services such as primary education and care for the elderly. Since administrative spending varies considerably between local governments, a study of the political and economic factors involved is warranted. The central hypothesis is that the administrators will have more power relative to the politicians when political control is divided between parties. Estimation of a demand model of administration added political structure shows strong empirical correlations between types of coalition governments and socialist controlled governments and the level of administrative spending. Divided political control strengthens the hands of the agenda setting bureaucrats.