Delegation of economic competences within local government

Abstract

Within the boundaries of national legislation, the assemblies in Danish municipalities define the scope and form of autonomy given to political committees, public agencies, and service-producing units in each policy area. Actors placed at identical levels in the hierarchy, but in different policy areas or different municipalities, might, therefore, experience a varied degree of professional and economic autonomy to prioritize, design, and plan the supply of public services. The comprehensive literature on Danish municipalities’ economic affairs overlooks the essential issue of decentralization of economic competencies within local governments. To fill this gap, this article uses a principal-agent perspective and analyzes data on politically decided budgets and appropriation summaries for Danish municipalities in 2009 and 2015 and shows that there is great variation across municipalities and policy areas in the degree of decentralization of economic competencies.