New development: Are the holding companies as a hybrid governance model reinforcing the control on municipal corporations?

IMPACT: The authors recommend that politicians and public managers consider the possible benefits and critical issues connected to the creation of holding companies at the local government level. On the one hand, municipal holding companies can be useful for steering and controlling municipal corporations; on the other hand, they can have the downside of adding another level of governance.

ABSTRACT: Corporatizing municipal services is a widespread reform adopted by municipalities around the world. To fully understand the types of corporations that are being set up, we need to investigate the strategies behind corporatization and how municipalities govern and control their corporations through the creation of municipal holding companies. In this new development article, the authors argue that it is high time to explore the political side of the municipal corporation. Scholars should explore the possible benefits and drawbacks related to the creation of holding companies at the local level. The authors’ assumptions are backed up by empirical observations from the Swedish context.