‘I’m on an island and I’ve got nowhere to run’ is the main chorus line of a song made popular by the Kinks. The atmosphere of isolation evoked by these lyrics is in many ways representative of the situation of the Icelandic subnational governments, both subjectively and objectively.
The Republic of Iceland is a small island state situated in the North Atlantic just below the Arctic Circle and is by far the smallest of the Nordic states, with a population of 364,000 (Statistics Iceland 2020), covering an area of 103,000 km2, with settlements concentrated on the coastline around the country and the middle of the country uninhabited. The Icelandic subnational system is usually assumed to be based on the Nordic model of local governance (Lidström 2003). The model is based on the decentralisation of responsibilities onto the subnational level and epitomised by strong local government both functionally and politically, as well as a large number of relatively small municipalities in comparison with other European states (Baldersheim et al. 2017; Kuhlmann and Wollmann 2014). The story of the Nordic model is portrayed as a story of success in almost every aspect of government reform, including economy, welfare, security and democracy (Lægreid 2018). The Icelandic subnational system shares many of the traits of the Nordic local government system, such as many small municipalities and an emphasis on the functional role of local government. Nevertheless, it has developed somewhat differently than its Nordic counterparts. Thus, the overall administrative capacity of the Icelandic sub-national government has been estimated as very low (Hlynsdóttir 2016, 2019). Moreover, the Icelandic political system has traditionally been seen as infested with clientelism and nepotism, and many believe this is still the case for the local level (Kristinsson 2015). The high level of favouritism has been attributed by Kristinsson (2001) to the fact that the political party system was established before the administrative system, mainly because Iceland was a part of Denmark and there was very limited local administration situated in Iceland until the early twentieth century. Kristinsson bases his conclusion on the work of Shefter (1977), who again based his work on the situations in Germany, Italy and the United Kingdom. This situation is, in many ways, representative of the tendency to generalise findings from large settings onto smaller settings and not vice versa.
The Concept of Size in Subnational Government Research
There is an agreement within the local governance research community that contexts such as culture, institutional design and demography are important factors when studying subnational governance (Loughlin et al. 2011). However, it is customary to exclude smaller municipalities from research designs in local government studies, usually based on the assumption that they are not comparable with larger units (Bäck et al. 2006). Hence, findings from research designs based on large municipalities are seen as generalisable onto smaller settings, while findings from small municipalities are not seen as relevant for larger settings. There are, of course, many cases of ‘smallness’ being an important variable in the mainstream local government literature (Kuhlmann and Bouckaert 2016; Loughlin et al. 2011). However, apart from a few notable exceptions such as the recent edition of The Routledge Handbook of International Local Government (Kerley et al. 2019), there is specifically a lack of cross-case analysis of subnational government and governance in small states. Moreover, there is a lack of consistency in the global data on subnational government (McMann 2018), and data on small states with less than one million in population are especially lacking (Corbett and Veenendaal 2018; OECD/UCLG 2019).
The Research Design of the Book
The aim of this book is to address the lack of information, in the scholarly literature, on subnational government and governance in small states through exploring the case of subnational government in Iceland. As pointed out above, Iceland deviates in many important ways from the Nordic model of local government, making the case of Iceland especially intriguing. It is a prosperous modern Nordic state with a high level of urbanisation, praised for its gender equality and technological advances. However, at the same time, welfare services were until recently much more centralised in Iceland than in the other Nordic countries, with subnational government playing a limited role in the overall development of the welfare system compared to the other Nordic states (Baldersheim et al. 2017; Hlynsdóttir 2018). Furthermore, and somewhat unusually for a Nordic state, clientelism has played a much larger role in the development of Icelandic politics, and accusations of nepotism are still common at both levels of government. Finally, an extreme level of fragmentation at the local level has given rise to problems in relation to service provision and professional capacity at the local level, and it has raised awareness of the overall efficiency and effectiveness of the Icelandic subnational government (Kristinsson 2015; Hlynsdóttir 2019).
Although situated in the context of small-states theory, the focus of this book is on the subnational government in small states. The term ‘subnational’ refers to levels of government below the central government; in a unitary country such as Iceland, this refers to local or regional government. Following the example of international institutions such as the OECD and the World Bank, the conceptualisation of subnational government concentrates on decentralised governments, thus excluding entities such as sub-municipal localities, special areas or special purpose districts. The main reason for this is the lack of coherent data on these entities in most of the stat...