One size fits all? Facility management in Norwegian local governments

Abstract

Up to the mid-1990s almost all Norwegian local governments had a decentralized structure on their facility management. Over the following 15 years a swift centralization followed, and in 2010 roughly 85% of the local governments used a centralized structure. Centralization is in accordance with the recommendation from a government commission studying the topic, but the arguments are not unambiguous. This paper formulates a stylized model for the relationship between facility management and production of welfare services. The model suggests that it is not obvious that a centralized structure is superior for all local governments, but that this may depend on local factors. Consistent with the predictions from the stylized model, the empirical findings suggest that large local governments with a weak political leadership centralize their facility management, while small local governments with a strong political leadership prefer a decentralized structure.