Markets and Municipalities: A Study of the Behavior of the Danish Municipalities

The complex pattern ofMarket Orientation of the 275 Danishmunicipalities is analyzed. An MO-variableis constructed from a poll covering 12tasks, where municipalities are free toproduce the service or purchase it on themarket. Six potential explanations of theMO-pattern are operationalized. Four ofthose work: (1) MO is a modernization, (2)spreading by diffusion. (3) MO increases ifthe municipality is under economicpressure. (4) MO stays low if the fractionof the population that depends upon thepublic sector is large. Whilestakeholder/pressure group politics thusworks, explanations based onideology/partisanship fail. In theintegrated Copenhagen metropolitan areamost explanations fail.