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Municipally owned corporations in Sweden : A cautionary tale

Bergh, Andreas LU and Erlingsson, Gissur LU (2023) In Public Money and Management
Abstract

IMPACT: Municipally owned corporations (MOCs) exist across the globe and have become increasingly common. They are motivated by the need for flexibility, a desire to cut costs and to increase efficiency. This article summarizes Swedish experiences with MOCs. It shows that the stated motivations are not necessarily wrong, but that relying heavily on MOCs may have unintended and adverse side-effects. Such side-effects include blurring the role of local politicians, increasing corruption risks and giving rise to complex organizational structures within local governments. Ultimately, transparency and democratic accountability may suffer because of an excessive reliance on MOCs. In particular, councillors, mayors and MOC chief executive... (More)

IMPACT: Municipally owned corporations (MOCs) exist across the globe and have become increasingly common. They are motivated by the need for flexibility, a desire to cut costs and to increase efficiency. This article summarizes Swedish experiences with MOCs. It shows that the stated motivations are not necessarily wrong, but that relying heavily on MOCs may have unintended and adverse side-effects. Such side-effects include blurring the role of local politicians, increasing corruption risks and giving rise to complex organizational structures within local governments. Ultimately, transparency and democratic accountability may suffer because of an excessive reliance on MOCs. In particular, councillors, mayors and MOC chief executive officers will benefit from reading these results, and ask themselves what kind of MOCs their municipality should operate, how many MOCs are appropriate to run, and also how members of MOC boards need to be educated.

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Please use this url to cite or link to this publication:
author
and
organization
publishing date
type
Contribution to journal
publication status
in press
subject
keywords
Accountability, corruption, delegation, local government, municipally owned corporations, New Public Management, principal–agent problems, Sweden
in
Public Money and Management
publisher
Taylor & Francis
external identifiers
  • scopus:85174832759
ISSN
0954-0962
DOI
10.1080/09540962.2023.2270272
language
English
LU publication?
yes
additional info
Publisher Copyright: © 2023 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group.
id
c3b95737-2a5e-40e3-ab6a-202a5dce940c
date added to LUP
2023-12-14 15:44:07
date last changed
2023-12-14 15:45:51
@article{c3b95737-2a5e-40e3-ab6a-202a5dce940c,
  abstract     = {{<p>IMPACT: Municipally owned corporations (MOCs) exist across the globe and have become increasingly common. They are motivated by the need for flexibility, a desire to cut costs and to increase efficiency. This article summarizes Swedish experiences with MOCs. It shows that the stated motivations are not necessarily wrong, but that relying heavily on MOCs may have unintended and adverse side-effects. Such side-effects include blurring the role of local politicians, increasing corruption risks and giving rise to complex organizational structures within local governments. Ultimately, transparency and democratic accountability may suffer because of an excessive reliance on MOCs. In particular, councillors, mayors and MOC chief executive officers will benefit from reading these results, and ask themselves what kind of MOCs their municipality should operate, how many MOCs are appropriate to run, and also how members of MOC boards need to be educated.</p>}},
  author       = {{Bergh, Andreas and Erlingsson, Gissur}},
  issn         = {{0954-0962}},
  keywords     = {{Accountability; corruption; delegation; local government; municipally owned corporations; New Public Management; principal–agent problems; Sweden}},
  language     = {{eng}},
  publisher    = {{Taylor & Francis}},
  series       = {{Public Money and Management}},
  title        = {{Municipally owned corporations in Sweden : A cautionary tale}},
  url          = {{http://dx.doi.org/10.1080/09540962.2023.2270272}},
  doi          = {{10.1080/09540962.2023.2270272}},
  year         = {{2023}},
}