Local administrative capacity based on the presence of expert staff in municipal city halls and inter-municipal cooperation entities

Abstract

Local government in Iceland has been through extensive functional reforms in the past three decades. Territorial reforms have been less successful even though the central government has openly aimed to enhance the capacity of the local governments. This study aims to estimate the administrative capacity of Icelandic local governments by estimating the level of expertise in the tasks of planning, education and social service. The findings show that there is a considerable difference with respect to size, as municipalities with more than 3,000 citizens have much higher levels of expertise in comparison to smaller municipalities. The municipalities are only partially able to turn to inter-municipal cooperation (IMC) for compensation because the municipalities in more densely populated areas are more likely to set up IMC entities than those in more sparsely populated areas. The municipalities in less populated areas are also more likely to buy their services from private service providers. Moreover, the smallest municipalities have transferred a large bulk of their functions to other municipalities through contracting. The findings suggest that IMCs may not be the best answer for small municipalities, especially those in rural and remote areas.

24th International Colloquium on Regional Sciences

“…In Iceland, this form of cooperation between cities and municipalities uses voluntary cooperation and the base of the project is the idea that cities provide municipalities with the opportunity to actively evaluate the costs and benefits of various services that they could provide together. One of the options used by Icelandic cities and municipalities is the "Shared Services Agreement", which is based on the integration or consolidation of selected services (Hlynsdóttir, 2019). The main argument is that there is a difference between services organized on the basis of cooperation -for example, the establishment of a joint entity or coownership agency with each municipality as an equivalent entity as when the services are provided by the municipalities themselves and arises the so-called added value.…”