Economic and Political Determinants of Fee Income in Norwegian Local Governments

This paper presents an empirical analysis of the determinants of fee income in Norwegian local governments. The point of departure is a representative voter model emphasizing the effects of pure economic variables. The benchmark model is extended by including two aspects of the political system: ideology and strength. It is evident that increased socialist influence increases the size of the local public sector, while a strong political leadership has an advantage in opposing pressure to increase spending.