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The influence of sub-national political entities is constitutionally sheltered in federalist states. However, decentralisation of political power from central to local government has also gained foothold in unitary states, notably in the Scandinavian countries. In Scandinavia, Denmark stands out as the most decentralised country, probably even more so than most federalist states. The article addresses the fiscal consequences of this decentralisation. On the one hand, fiscal federalist theory expects decentralisation to lead to less local spending. On the other hand, mainstream decentralisation theory as well as classic economic theory predicts that this is not necessarily so: it depends on the preferences of the local population. Thus, if there are pro spending voter attitudes, decentralisation is likely to increase local spending. The evidence from Danish local governments supports the latter interpretation of the merits of decentralisation. Local governments are not more fiscally prudent than central government, but their spending patterns are much more in line with voter than central policy maker preferences.

"The influence of sub-national political entities is constitutionally sheltered in federalist states. However, decentralisation of political power from central to local government has also gained foothold in unitary states, notably in the Scandinavian countries. In Scandinavia, Denmark stands out as the most decentralised country, probably even more so than most federalist states. The article addresses the fiscal consequences of this decentralisation. On the one hand, fiscal federalist theory expects decentralisation to lead to less local spending. On the other hand, mainstream decentralisation theory as well as classic economic theory predicts that this is not necessarily so: it depends on the preferences of the local population. Thus, if there are pro spending voter attitudes, decentralisation is likely to increase local spending. The evidence from Danish local governments supports the latter interpretation of the merits of decentralisation. Local governments are not more fiscally prudent than central government, but their spending patterns are much more in line with voter than central policy maker preferences." (author's abstract)

It is often presumed that state and local governments contract out services in order to address budget shortfalls. In this study of public school districts in Washington state, however, results show that districts with stronger fiscal balances are more likely to contract out services than those experiencing fiscal stress. The study finds that teaching salaries as a share of the budget appear to be unaffected by the level of contracting out. It may be, therefore, that school districts find it politically desirable to absorb uncertainty during more solvent times by using slack or last-minute projected surpluses to cover spending for contracting out auxiliary services that can easily be reduced later without affecting staff. This notion of providing a buffer in the budget has implications for the public sector at large. Adapted from the source document.

Although the concept of 'neo‐corporatism' has been around for 30 years, it has many different meanings. Nonetheless, evaluations of the level of corporatism in different countries turn out to be remarkably similar despite differences in the theoretical meaning of 'corporatism'. That the Scandinavian countries are among the most corporatist countries and the United States the least is thus shared conventional wisdom among different corporatist schools. The conventional wisdom and its underlying conceptual pragmatism are challenged in this research. Empirically, it is demonstrated that the level of corporatism in the United States comes close to the level in Denmark if the Scandinavian 'boards and commissions' variant of the concept of 'corporatism' is applied. It can even be argued that the pattern of interest groups' participation in boards and commissions in the United States is more in line with the corporatist idea that interest group involvement varies with the saliency of issues of the boards and commissions to interest group than it is the case in Denmark. The empirical findings of the study conflict with deeply rooted perceptions of the presence of corporatism in the United States and Scandinavia. How to make sense of similar levels of 'Scandinavian' corporatism in the United States and Denmark is discussed in the conclusion of the article.

Privatization has been on the political agenda for the last two decades. The literature points to two major explanations of privatization. One explanation is political‐ideological, considering privatization to be a Liberal‐Conservative strategy. Economic crisis or fiscal stress is the other main explanation of privatization. The two theses are investigated by evaluating the determinants of contracting out in Danish local governments. The analysis shows that fiscal stress is strongly, but inversely related to contracting out, while Liberal‐Conservative political leadership is not associated with higher levels of contracting out than Social Democratic governance. Thus, the richer a local government becomes, the more it contracts out. Although party politics is not decisive for contracting out, the motivation seems to be political rather than economical. Specifically, it is argued that in a strongly decentralized public sector with influential public employees, contracting out is possible in good times when revenue and public expenditure are easier to increase, which reduces public employee resistance to contracting out.

Privatization has been on the political agenda for the last two decades. The literature points to two major explanations of privatization. One explanation is political-ideological, considering privatization to be a Liberal-Conservative strategy. Economic crisis or fiscal stress is the other main explanation of privatization. The two theses are investigated by evaluating the determinants of contracting out in Danish local governments. The analysis shows that fiscal stress is strongly, but inversely related to contracting out, while Liberal-Conservative political leadership is not associated with higher levels of contracting out than Social Democratic governance. Thus, the richer a local government becomes, the more it contracts out. Although party politics is not decisive for contracting out, the motivation seems to be political rather than economical. Specifically, it is argued that in a strongly decentralized public sector with influential public employees, contracting out is possible in good times when revenue & public expenditure are easier to increase, which reduces public employee resistance to contracting out. 5 Tables, 33 References. Adapted from the source document.