Reintegration Failure and Outsourcing Upside: Organisation of Public Transport in Norway

Abstract

After two decades of public sector outsourcing, debates for reintegration of services back into the public sector have emerged. However, so far outsourcing remains prevalent and reintegration is sparsely utilised. An in-depth analysis of the reorganisation of public transport in a Norwegian county, Sør-Trøndelag, provides three key reasons as to why there is an ‘outsourcing upside’. Firstly, existing structures limit available alternatives for legislators, thereby making reintegration of public services back into public hands difficult. Secondly, under certain conditions competitive tendering may enhance political steering and thus make outsourcing politically desirable. Thirdly, the establishment of a quasi-autonomous agency allows the opportunity for economies of scale through cooperation with other counties and cities, thereby improving co-ordination in the public transport system.