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En institusjonell tilnærming til dispensasjonspraksis i NorgeLeikny Gammelmo1

Vitenskapelig bedømt (refereed) artikkel

Leikny Gammelmo: An Institutional Approach to Dispensation Practice in Norway

KART OG PLAN, Vol. 76, pp. 182–196, POB 5003, NO-1432 Ås, ISSN 0047-3278.

The Norwegian Planning and Building Act seems to provide several opportunities to exercise discre-tion and give dispensations from the rules. In areas where the Planning and Building Act and landuse plan prohibit the subdivision of real property, dispensation seems to be given more frequentlythan the intentions of the government would imply. Why is this so? Are the rules unclear or do thepublic administration and politicians in the municipality develop their own norms and procedures?By using dispensation within the legal system, the municipality is allowed to set aside the funda-mental idea of planning. This paper uses institutional theory to look into the phenomenon of dispen-sation. Using Ostrom’s Institutional Analysis and Development (IAD) Framework it is possible to seewhat factors have an impact on the result of an application.

Key words: real property, public administration, discretion, dispensation, institutional theory, trust.

Leikny Gammelmo, PhD student, Norwegian University of Life Sciences, Department of LandscapeArchitecture and Spatial Planning, P.O. Box 5003, NO-1432 Ås, Norway. E-mail: [email protected]

IntroductionWithout rules, there would be chaos. If welived our lives and determined our actionswithout rules we would be, according to Hob-bes, in a state of war, with everyone againsteveryone. This was his model of the state ofnature, an untidy condition requiring rules.People first constructed informal rules anddevised sanctions for not following them. To-day we can use the formal and informal rules– our institutional framework – to seekknowledge about how our actions should beperformed.

The process of forming real property is af-fected by numerous different interests. Therules of the Planning and Building Act2 andthe land use plans do not always successfullymatch the wishes of the landowners or devel-opers, nor the public interest. In Norway, away of balancing the various interests in a

reasonable decision is to grant dispensationfrom the general rules. Institutional theorywill be used to explore the process of grant-ing dispensation and the way in which vari-ous forces affect this process. In the discus-sion below the term dispensation is definedas the process of granting dispensation fromthe general rules on forming real property.

The theory of institutions is primarilybased on the work of Ostrom (1933–2012). In2009 Ostrom received «The Sveriges Riks-bank Prize in Economic Sciences in Memoryof Alfred Nobel» for «her analysis of economicgovernance, especially the commons»3. It isalso based on North (1920–20154), who re-ceived the Nobel Prize back in 1993 «for hav-ing renewed research in economic history byapplying economic theory and quantitativemethods in order to explain economic and in-stitutional change»5.

1. Project web page: https://www.nmbu.no/prosjekter/node/252072. LOV-2008-06-27-71: Lov om planlegging og byggesaksbehandling (plan- og bygningsloven)3. http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/2009/press.html [15 Nov. 2015]4. https://news.wustl.edu/news/Pages/douglass-north-obituary-11.24.15.aspx [1 Des. 2015]5. http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/1993/north-facts.html [15 Nov. 2015]

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Institutional theory can be one way to un-derstand social science. In the field of proper-ty formation Ramsjord (2014) has used it inhis research about property formation, whileRidderstrøm (2015) has done so to studyplanning and health. This can provide a use-ful perspective for my project about munici-palities and the property formation process.This paper will introduce the idea of usingOstrom’s Institutional Analysis and Devel-opment (IAD) Framework in this context.The research project «Changing real proper-ty» will focus on the public administration6

in the municipality and its role according tothe Planning and Building Act and practicein property formation processes. This projectwill look at the process for cases of the kinddescribed in the Planning and Building Act,section 20-1 letter m.

Land use plans are legally binding in Nor-wegian law. Nevertheless, the NorwegianPlanning and Building Act, chapter 19, givesmunicipalities the opportunity to approve anapplication that does not comply with therule of law or land use plan, provided thatcertain conditions are met. The dispensationcan be subject to certain conditions, for a spe-cific period, or «forever». Dispensation maybe given in conjunction with a building appli-cation or in the property formation process.The example in this paper will be the case ofproperty formation as subdivision of realproperty. The main focus of this paper is ondispensation according the Norwegian Plan-ning and Building Act chapter 19 seen froman institutional viewpoint, and the evolutionof these rules, which seem to largely developas local practice.

According to national statistics from 2014,the number of dispensations in Norway inareas zoned for agriculture, nature and rec-reation have not been higher since 2003. Thenumber of dispensations in the 100-meterbuffer zone along watercourses and the seashore also appears to be on the increase, seefigure 3. There are no good statistics showingdispensations from the prohibition against

subdivision of real property. Still, in manycases an application for subdivision of realproperty will be what provides land to buildon7.

The intention of the Norwegian Planningand Building Act of 2008 was to restrict theability to grant dispensation. The rules canbe said to be unclear, leaving a high degree ofdiscretionary power in the hands of the pub-lic administration. Actions, norms, and indi-vidual adaptations in municipalities seemsto evolve, if not in different directions, thenat different speeds. Why is this so? Are therules unclear or do the public administrationand politicians in the municipality developtheir own norms and procedures?

The aim of this paper is to use institution-al theory as a perspective for looking at thepublic administration’s way of handling dis-pensations relating to the subdivision of realproperty; can this theory explain how insti-tutions involved in dispensation practicehave evolved in the public administration inNorway?

Method and dataThis paper, and hence the method used, is aliterature study. The aim is to gain a betterunderstanding of institutional theory and ofhow to use this perspective to look at ques-tions related to property formation. The lit-erature is «a body of information existing in awide variety of stored formats that has con-ceptual relevance for a particular topic of in-quiry» (Groat and Wang 2002). The challengeis to use this body of information to get anoverview of the topic of inquiry according tokey sources, key theories, and the major is-sues and debates about the topic. And then toreport the research, as Oliver (2010:168)puts it, accurately and in a way that is acces-sible to the reader. The paper aims to give aninsight into how institutional theory can beused in research on property formation. Theliterature reviewed is divided into twogroups: (1) literature on institutional theory;

6. Public administration in this context, is the part of government dealing with real property like the planning aut-hority, the examiner of the application for subdivision of real property, the land surveyor, or the registrar of the land register and cadastral map.

7. In Norway, the system requires that you first apply for dispensation for the subdivision of real property and then a further dispensation for the building project. See statements from the Ministry of Local Government and Modernisation 2007a and 2007b.


Bedømt (refereed) artikkel Leikny Gammelmo


and (2) literature about dispensations pursu-ant to the Norwegian Planning and BuildingAct chapter 19.

Data about current practice comes fromthe questionnaire in the research project«Changing real property». This data was col-lected over the period from 1 December 2015to 5 February 2016. The questionnaire wassent to people in the public administrationwho handle applications for property forma-tion. Out of 428 municipalities, 408 handlethese applications themselves, and 237 an-swered the questionnaire. This gives a re-sponse rate of 58%. The answers come frommunicipalities in all regions of Norway andrepresent all sizes of municipalities meas-ured by population. The questionnaire wassent to the respondents directly using thesoftware Questback.

BackgroundProperty formation in NorwayTo understand the institutions involved inproperty formation and the use of discretionin dispensation cases, a short introduction tothe nature of property formation is needed.Property formation is about developing andevolving our built environments. It can becarried out for the sake of profit, for greaterprivacy, to improve the use of the real prop-erty or for the common good. Alternatively,

viewed in a wider perspective, it is the reali-zation of a land use plan.

In the context of this paper, a rather sim-ple8 example of property formation will beused: subdivision of real property into two ormore real properties. Figure 1 shows an ex-ample of subdivision where the landownerwants to divide his or her real property, 1/1,into two. This will later be used as an exam-ple when describing a case of subdivisionthat requires dispensation. Now the figure il-lustrates a «normal» case where there is noneed for dispensation. According to the Plan-ning and Building Act section 20-2 and 20-1letter m, you have to send an application andget approval when you want to subdividereal property. The application should includespecific information about the project and bein accordance with the Planning and Build-ing Act and the land use plan.

Discretion and dispensationIn the Planning and Building Act, we findseveral sections that give room for discre-tion. One example is in section 26-1. The newreal property should not be formed in a waythat makes it unfit for being built on becauseof its size, shape or location. What is consid-ered a good or bad shape is part of the discre-tionary practice. Another example can befound in section 27-4, which deals with theneed for access to the new real property. Be-

8. Simple in the way of illustrate, it is not necessary simple to handle for the public administration.

Figure 1: The landowner, A, has an agreement with a buyer, B, to divide A`s real property (1/1)into two, so B can set up a house (1/2). To do so they first have to send an application for sub-division of the real property to the municipality, in accordance with the Planning and Buil-ding Act section 20-2 and 20-1 letter m.




fore a new real property is approved, lawfulaccess to a road that is open to the generalpublic or permit holders must be secured, orsome other road connection which the munic-ipality considers satisfactory. Then in the fi-nal sentence of this section, it says that ifthis road connection, at the municipality’sdiscretion, cannot be obtained without dis-proportionate difficulty or expense, the mu-nicipality may accept a different arrange-ment.

These examples show that the public ad-ministration is given power to make its ownjudgment; in other words it is given discre-tion. In a court of law discretion is defined as a

«liberty or privilege allowed to a judge,within the confines of right and justice, butindependent of narrow and unbendingrules of positive law, to decide and act inaccordance with what is fair, equitable,and wholesome, as determined upon thepeculiar circumstances of the case, and asdiscerned by his personal wisdom and ex-perience, guided by the spirit, principles,and analogies of the law» (Law Diction-ary).

In the context of the public administra-tion, the Law Dictionary’s next definition ismore appropriate:

«When applied to public functionaries, dis-cretion means a power or right conferredupon them by law of acting officially in cer-tain circumstances, according to the dic-tates of their own judgment and con-science, uncontrolled by the judgment orconscience of others. This discretion un-doubtedly is to some extent regulated by us-age, or, if the term is preferred, by fixedprinciples» (Law Dictionary).

As the examples above show, these sectionsof the planning and building act allow discre-tion to be exercised. Another example is theuse of discretion in cases of dispensation.When the landowner or developer wants to

do something slightly different from the landuse plan, they ask for dispensation. Dispen-sation is an exemption from the act and reg-ulations «a permission to do something for-bidden (…). A relaxation of law for the bene-fit or advantage of an individual» (Law Dic-tionary). The Planning and Building Actchapter 19 gives this opportunity in section19-1:

«Dispensation requires a reasoned applica-tion. Before a decision is made, neighborsshall be notified by means as mentioned insection 21-3. Special notification is howev-er not necessary where the application fordispensation is filed at the same time as anapplication for a permit pursuant to chap-ter 20, or where the application clearlydoes not affect the neighbors’ interests. Re-gional and central government authoritieswhose field of responsibility is affected di-rectly shall have an opportunity to expresstheir views before dispensation is grantedfrom plans, planning requirements and theprohibition in section 1-8.»

The arguments to get this approval must berelated to the real property and be possiblefor anyone to invoke. If the application forsubdivision of real property requires dispen-sation, there are three possible reasons:

1. The subdivision is in an area where the actprohibits division9

2. The subdivision is in an area where theland use plan prohibits division10

3. The subdivision is not in accordance withthe requirements of the plan11

The authority empowered to grant dispensa-tion is the municipality (section 19-4). Themunicipality, often represented by theStanding Committee for Planning, is con-ferred the authority to grant dispensation.The municipality can also delegate authorityto the administration, which then makes theadministrative decision on the application.According to my research, only 40% of re-

9. Such as the prohibition zone 100-meter border to water.10. For example when the use of new real property is for housing and the purpose in the land use plan is industrial

purposes.11. For example, the size of the new real property is larger than maximum size in the regulations.




spondents say that the decisions about dis-pensation are delegated. What some of themalso say, in answer to an open-ended ques-tion, is that this may depend on the complex-ity of the case. The landowner has to providean application for dispensation (section 19-1). Affected parties are notified, both neigh-bours and regional authorities.

The first Planning and Building Act cameinto force in 196512. The act regulated,among other things, the planning of use ofour environment. The ability to grant dis-pensation was introduced in section 7 of the1965 Act. The question of dispensation prac-tice was discussed during the revision of thisact. The new act came into force in 198513

and the ability to grant dispensation contin-ued in section 7. Section 17-2 of the 1985 Actregulated a 100-meter buffer zone along wa-tercourses and the sea shore. Then a new, to-tally revised Planning and Building Act wasintroduced in 2008. Now there is a new pro-posal to change the rules on dispensationagain (Ministry of Local Government andModernisation 2015).

Decisions on applications for dispensationprobably involved a greater degree of discre-tion under the Planning and Building Act of1985 than under today’s act. The possibilityof granting dispensation remained in the2008 Act, but partly because of challengesarising from different practices with respectto «special reasons» (section 7 of the 1985Act), the principle of «reasoned application»was introduced in section 19-1, and section19-2 specified that evaluations should bebased on a balancing of considerations.

No one has an entitlement to a dispensa-tion and it is not straightforward to get one.The preparatory works for the current Plan-ning and Building Act (Ot.prp. nr. 32 (2007–2008) section 6.19) point this out, as well asthe importance of the process that precedesthe approval of a land use plan. The objec-tives behind the provision from which dis-pensation is given must not be significantlydisregarded. In addition, there has to be aweighing up of interests, where the benefitsof the case must be weighed against the dis-advantages. The government highlighted an

important difference between giving dispen-sation from a land use plan and changing theplan. If we grant dispensation, the plan re-mains unchanged (Government 1984). Dis-pensation can thus be an easier way to adaptto current needs.

Introducing a caseTo illustrate a case where the application forsubdivision needs dispensation we will usethe first figure and add some further infor-mation, see figure 2. In this case the land-owner, A, wants to sell a part of his real prop-erty, 1/1, to buyer B. The real property liesless than 100 metres from the shore, so Aneeds dispensation from the prohibitionagainst dividing land in this area (section 1-8). The real property is designated as farm-land in the land use plan. In this area, thereis a general prohibition against division ofland if it is not for agricultural use. B wantsto buy the new real property to build a house.They are in need of a second dispensation. Asends a complete application to the munici-pality.

The decision on whether or not dispensa-tion shall be given involves balancing vari-ous considerations invoked by the landown-er, A, against the interests of society. It canbe argued that it is important to preserve na-ture while the owner’s argument in favour ofplots for development coincides with the mu-nicipality's desire for more housing. In somemunicipalities, there may be one person whoexercises this discretion. In others, they willhave an interdisciplinary discussion. Re-gardless of the discussion in the municipali-ty, a consultation process is needed if the mu-nicipality wants to give its approval. Thisprocess can be an action situation in the In-stitutional Analysis and Developmentframework (see figure 6). In answer to thequestion of whether they send the case toconsultation if needed, nearly 90% of the re-spondents answered often or always.

A dispensation in this example entitles Ato do something other than the land use planintends. The first dispensation in this exam-ple leads to a new real property. The nextstep requires dispensation from the prohibi-

12. LOV-1965-06-18-7 Bygningslov (repealed)13. LOV-1985-06-14-77 Plan- og bygningslov (repealed)




tion against building in the 100-meter beltalong the shore, in an area near the waterthat should be available to the public for rec-reational activities. The second dispensationin this example entitles A to establish a newresidential property in an area where theland should be used for agriculture. Askingfor a dispensation in areas designated asfarmland is the most common request ac-cording to the respondents (over 70 % markthis as a reason that occurs often).

The example shows two different types ofdispensations (type 1 and 2 mentionedabove). In some municipalities, you will notget approval to divide agricultural land with-out going through a planning process. In oth-ers, granting dispensation can be a way of

solving a problem of finding land to build onand enabling population growth, or reflect apolitical desire to give people the right to de-cide for themselves where to live. The use ofdispensation can be a result of an old planthat does not meet today’s needs. The re-spondents were asked if they emphasizedvarious considerations when processing ap-plications. The options included local politi-cal goals like increased settlement, whichnearly 70% of the respondents marked as areason. The nature of the new real property,e.g. whether it will create new jobs, was alsoimportant. Equal treatment was the mostimportant consideration of the options givento the respondents. This was cited by over90%. See the result in table 1.

Table 1: When processing an application for dispensation various considerations can be em-phasized. The respondents were asked which of the following considerations they emphasize; it was possible to choose more than one.

Figure 2: Example: The owner of 1/1 will sell a part of his real property. The new real propertywill be less than 100 meters from the shore and in a part of the municipality where the landuse plan says it is only for farmland.

Percent

Applicant's credibility 6.2%

Applicant's role / position in the community 0.5%

Equal treatment 92.9%

The project's nature (e.g. that it creates jobs) 51.2%

Local policy objectives (e.g. increased settlement) 69.7%

N 211




As can be seen from the statistics in figure 3there has been increasing use of dispensa-tion over the last ten years. This seems sur-prising given that the rules where madestricter during this period. The formal ruleshave changed but practice seems to havemoved in the other direction. The figureclearly shows that there has been no reduc-tion in dispensations after the new Planningand Building Act came into force in 2009.The numbers refer to new buildings. As de-

scribed earlier, there is often an applicationfor subdivision of a real property before thebuilding application, and the same politicalconsiderations and land use plan underliethe approval of these applications. In themost recent five-year period to 2014 dispen-sations granted for new buildings in areasdesignated for agriculture, nature conserva-tion, outdoor activities and reindeer hus-bandry have increased by 13% (StatisticsNorway).

Institutional perspectiveInstitutional researchInstitutional theory provides a perspectivefor investigating and doing research. Whendealing with institutional theory the term«institution» needs to be defined. Definingthe term institution Bush (1987) starts withthe society and builds a pyramid or puzzle todefine institutions:

«Society may be thought of as a set of insti-tutional systems. An «institutional sys-

tem,» in turn, may be thought of as a set ofinstitutions. And an institution may be de-fined as a set of socially prescribed pat-terns of correlated behaviour. In each of theabove sentences the term «set» refers tofunctionally interrelated elements» (Bush1987:1076).

In this way, the institution investigated is apart of an institutional system and the socie-ty consists of numerous systems. I will as-sume that the institutions also affect each

Figure 3: This figure shows the number of dispensations granted for new buildings in the 100-meter belt. There is often an application for subdivision of a real property before the buildingapplication and that application will in these cases also require dispensation (Source: Statis-tics Norway).

0

10

20

30

40

50

60

70

80

90

100

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Percentage of applications for dispensation granted. New buildings in the 100-meter belt.




other. Peters (2012:6) makes a connection be-tween the State and society by saying that«[t]he State is virtually a metaphysical enti-ty which embodies the law and the institu-tions of government, yet somehow also tran-scends those entities. Also, in this traditionthe State is linked organically with societyand society is significantly influenced by na-ture of the State».

North (1990) defines institutions as therules of the game in a society or, more formal-ly, the humanly devised constraints thatshape human interaction (North 1990:3).The role of the institutions «in a society is toreduce uncertainty by establishing a stable(…) structure to human interactions» (North1990:6). Furthermore, they «provide the ba-sic structure by which human beingsthroughout history have created order andattempted to reduce uncertainty in ex-change» (North 1990:118).

Ostrom (2005:3) proposes that «broadlydefined, institutions are the prescriptionsthat humans use to organize all forms of re-petitive and structured interactions (…) In-dividuals interacting within rule-structuredsituations face choices regarding the actionsand strategies they take, leading to conse-quences for themselves and for others.»

Mahoney and Thelen (2010:4) argue that«nearly all definitions of institutions treatthem as relatively enduring features of polit-ical and social life (rules, norms, procedures)that structure behaviour».

Peters (2012) introduces several definitionsof institutions. Different approaches to insti-tutions in the new institutionalism are inves-tigated. For every approach, a definition of in-stitutions is given. The idea of a «good institu-tion» is described under the various approach-es. Some of these approaches will be dealtwith later in this paper. In his discussion ofnormative institutionalism, Peters (2012:29)describes institutions as a loosely used wordin political science «to mean everything froma formal structure like a parliament to veryamorphous entities like social class, with oth-er components of the socio-political universesuch as law and markets also being describedas being institutions».

To summarize, there has been and still isresearch carried out to understand institu-tions and to use institutional theory to un-derstand reality. The institutions are formaland informal statements of how people can,must or must not interact with each other.The institution that is the topic of inquiry inthis paper is the use of dispensation in thecase of subdivision of real property. This in-stitution is a combination of statutory au-thorization, norms, and traditions in the rel-evant municipality, political goals and otherexogenous variables.

The fact that reality is complex and not alltypes of subdivision of real property are ade-quately covered by the rules and land useplans leads to the need for other rules. At theoutset, there are norms about living togeth-er, and ideas about ordered allocation of landto various activities. Then we have enactedrules about it, monitoring and sanctioningcompliance with rules and norms about liv-ing together, and about land use. Adaptingrules to a complex reality can require a sys-tem of dispensations.

New institutionalismInstitutional theory is not new. Peters (2012)has introduced the idea of new institutional-ism. This opens the possibility of applyingthis theory to fields outside those where ithas traditionally been used. In the field ofproperty formation, institutional theory isused, in the most recent years, by Ramsjord(2014), Ridderstrøm (2015), Hanssen, Hof-stad and Saglie (2015), and Singsaas(201614). Ramsjord uses the theory of trans-action costs to analyze private developers`use of the land consolidation court in proper-ty formation processes. A process, which inmost cases is carried out by the public ad-ministration in the municipalities.

In the case of dispensation, the historicalperspective is of importance. The evolution ofinstitutions has roots in the past. As Peters(2012:viii) says, «Human learning is morethan the accumulation of the experiences ofan individual over a lifetime. It is also the cu-mulative experiences of past generations.»You may say that the institutions are our col-

14. Public defence 28 February 2016 at NMBU. Title of the thesis «Regional Planning as a Tool for Comprehensive Management in the Wild Reindeer Mountains».




lective memory of the past. According to Ma-honey and Thelen (2010) there is normally agradual change if we see the institution in ahistorical perspective. It might seem like aparticular event changed the rules, but look-ing at history the rules can be formed in thesociety as informal rules long before they arewritten down. And changes in the formalrules are often part of a process or a reflec-tion of how the rules are actually used inpractice.

According to Peters (2012:25, 26) it wasMarch and Olsen15 and their theoretical per-spectives that reshaped political science. In-stitutional analysis had a comeback and be-came a central part of the discourse in polit-ical science. Peters refers to this as norma-tive institutionalism. «This title reflects thecentral role assigned to norms and valueswithin organizations in explaining behaviorin this approach» (Peters 2012:26). Peopleare shaped by their membership of institu-tions. They must «pick and choose among in-fluences and interpret the meaning of theirinstitutional commitments. (…) the individu-als select a number of different roles andplay those appropriate for the institutionthat is most relevant at the moment.» Or«search for some reconciliation among thememberships that is good enough» (Peters2012:26). The roots are to be found in the oldinstitutionalism of sociology and organiza-tion theory. March and Olsen saw the norma-tive basis as appropriate for political sciencetoo (Peters 2012:28). March and Olsen saidthat «social, political, and economic institu-tions have become larger, considerably morecomplex and resourceful» (March and Olsen1984:734), which can also be said about to-day`s society.

Humans make institutionsIn an article, Fennell (2011) defines «Os-trom's Law: A resource arrangement thatworks in practice can work in theory.» Thisties in with the thoughts of de Soto (2001)about «listening to the barking dogs» in ref-erence to making institutions by listening to

the people and in a way implementing theextralegal into the legal system. «Institu-tions are constructs of the human mind» ac-cording to North (1990:107). And as previ-ously mentioned, we make them to providestructure, to escape from chaos.

The first step of making informal rules isto write them down, or in other ways ensurethat people know about them. The next stepis then to ensure that the rules are followed.Rules are said to be never self-interpretingand never exhaustive. In many situations,we just know what to do, how to deal with thesituation. We do not apply the rules con-sciously or unconsciously.

According to Searle (1995) importantparts of institutions exist only in the mindsof people. If we look to Douglas (1986) shesays that the strongest institutions existonly in the minds of people. The importanceof the culture and society will make a differ-ence to the development of institutions andhow they change through time. It might beeasier to relate to a rule that you under-stand. «I believe we have recently underesti-mated the degree to which people accept in-stitutions because they think the institu-tions have the right answer, because institu-tions embody a value that the people also ac-cept» Stinchcombe (1997:8) says.

Humans are part of the institutions, likeguardians. In the case of dispensation, theseactors will be the people working in the pub-lic administration and the judicial authori-ties. There must be someone who believes inthe rules and guards them in order for themto work (Stinchcombe 1997). Then we havedifferent communities that interpret therules. These can be epistemic communities.These are a «network of knowledge-based ex-perts who help decision-makers to define theproblems they face» and they «are socio-psy-chological entities that create and justifyknowledge»16. On the other side, so to speak,we have the corporate culture. This can be ofgreat interest when it comes to dispensation.The understanding of such rules can evolvein the public administration. In a way, we

15. Peters refers to writings in the 1990s. The first writings, which provided the foundation stones for Marc and Olsen’s later work were «The New Institutionalism: Organizational Factors in Political Life» (1984) and «Redis-covering Institutions. The Organizational Basis of Politics» (1989).

16. Definition available at https://en.wikipedia.org/wiki/Epistemic_community [20 Nov. 2015].




can have guardians of the rules interpretingthem differently and thereby evolving differ-ent dispensation practices.

Other actors may want everything to re-main as it is – to maintain the status quo.The institutions we have or the current un-derstanding of them suits this actor. «Pathdependence means that history matters»writes North (1990:100). There are partiesthat over the years have gained benefitswithin the system as it is. These are de-scribed as symbiont change-agents by Ma-honey and Thelen. While they «rely on thepreservation of the institution, parasitesthemselves carry out actions that contradictthe «spirit» or purpose of the institution,thus undermining it over the long run» (Ma-honey and Thelen 2010:24). This type ofchange-agent seems to occur in the context ofdispensation (figure 6).

Institutional change«We live in an uncertain and ever changingworld that is continually evolving in new andnovel ways» says North (2005:vii) in his bookabout economic change. He points out theneed to see economic change in a broaderperspective. It is a result of other changes(North 2005:1):

1. in the quantity and quality of human be-ings

2. in the stock of human knowledge particu-larly as applied to human command overnature

3. in the institutional framework that de-fines the deliberate incentive structure ofa society

This broader perspective will be applicable toother topics as well. Seeing changes in theway of giving dispensation is part of a largerpicture. It has to be seen in the perspective ofchanges in the surroundings. In this perspec-tive North (1990:91) points out another thingthat is also important, «perhaps most impor-tant of all» he says «the formal rules change,but the informal constraints do not». So inthe Planning and Building Act from 2008they changed the rules for dispensation, but

maybe the implementation of the ruleshasn’t changed that much because of the waythe public administration practises discre-tion and the politicians’ wishes for the mu-nicipality.

So let us walk on «the path of institutionalchange», as North (1990:92) describes it.Evolution in biology17 has inspired North’sway of describing economic evolution. Never-theless, there is a significant distinction be-tween these two fields, because in economythe selection mechanism is «informed by be-liefs about the eventual consequences»(North 2005:66). He points out the impor-tance of humans being able to take decisionsbased on knowledge, beliefs and culture.Bush (1987) also discusses culture:

«Socially prescribed behavior is the story ofhow these choices, and the critical historyof any culture is the story of how thesechoices evolved in the life experience of thecommunity. (…) institutional change isdiscretionary precisely because all socialprescriptions are the outcomes of consciouschoices made at some point in the life his-tory of the culture» (Bush 1987:1077).

He then introduces the terms behaviour (B)and value (V) and says, «The diagnostic char-acteristic of an institution is the value struc-ture that correlates the behaviour within it.It follows from this that institutional changemust entail a change in the value structureof the institution» (Bush 1987:1078). Theconnection of institutions with history andculture is a recurring theme in the under-standing of institutions. To simplify the mat-ter slightly, it revolves around how they werebrought into being by humans in the firstplace, how the actors understand them, andhow they now change.

Turning to Mahoney and Thelen (2010) wefind an introduction to a theory of gradualchange. As they say: «Once created, institu-tions often change in subtle and gradualways over time» (Mahoney and Thelen2010:1). What also appears to me on readingthem is that institutions contain the possibil-ity of change within themselves. It is the

17. See Lewis and Steinmo (2012) article on how institutions evolve and the evolutionary theory.




very nature of institutions that they canchange over time. Mahoney and Thelen pro-vide us with a tool for understanding whatkind of change we will get, based on the char-acteristics of the institution in question, thepolitical context and the kind of change-agent (Mahoney and Thelen 2010:table 1.2and 1.4).

Institutions providing securityWe have now looked into some of the theorieson how institutions evolve and change. Weknow that we need the institutions to pro-vide order and hence security. What kind ofsecurity do they provide in the context ofsubdivision of real property and the localprocessing of applications for dispensation?To answer this question I will state thatthere are two important keywords: informa-tion and trust.

North (2005:15) highlights uncertainty asa challenge and he introduces five differentdegrees of uncertainty defined by how theycan be reduced:

1. Uncertainty that can be reduced by in-creasing information given the existingstock of knowledge.

2. Uncertainty that can be reduced by in-creasing the stock of knowledge within theexisting institutional framework.

3. Uncertainty that can be reduced only byaltering the institutional framework.

4. Uncertainty in the face of novel situationsthat entails restructuring beliefs.

5. Residual uncertainty that provides thefoundations for «non-rational» beliefs.

Rules and information can be helpful to re-duce uncertainty. When legislation gives thepublic administration space to practise dis-cretion and to give dispensation, it will re-sult in a lack of information in the systemand for future landowners. The land admin-istration system shows the land use plan. Adispensation will not alter this plan and willbe «invisible». Some people will hear that itis easy to get a dispensation and some willhave the opposite impression. This lack ofinformation can make the outcome unpre-

dictable and it can weaken people’s confi-dence in the system.

Arruñada (2012) has written about thebenefits of impersonal exchange. It increasesthe number of potential buyers for a proper-ty, it means you can get information withoutknowing the buyer and as a buyer you do notneed to know the landowner. A land registra-tion system can provide this information.Another important benefit is reduced trans-action costs. In the context of the subdivisionof real property, Arruñada’s ideas can be use-fully applied to the availability of informa-tion, but the benefits of reducing transactioncosts are less relevant. When it comes to landregistration systems, this can vary from asimple register to a land administration sys-tem18. In the case of dispensation, it could bean important source of information if all dis-pensations were registered and marked inthe map. Landowner would have access tomuch more information.

Rothstein (2005) combines the presence ofsocial traps and trust with institutional the-ory. He points out that there can be differenc-es, not only between countries but also be-tween communities (Rothstein 2005:26). «In-cluding people to make the transition frommistrust to trust is probably one of the moredifficult tricks in the world of politics» (Roth-stein 2005:23). Trust can be important for aninstitution and society to work. It seems thatthere are no recipe for getting out of a socialtrap. «In concrete terms, what might be theprocess that the actors in a society undergoas they make the transition from deep mis-trust to trust? That is, once we have endedup in a social trap, how do we get out of it?»(Rothstein 2005:167).

Returning to dispensation practice, trust isessential to ensuring that people believe thatapplications receive equal treatment. Dispen-sation is in some ways a means test. This canlead to mistrust. Normal application process-es are more transparent and trustworthy. Asubdivision according to a land use plan willnearly automatically give the landowner anapproval. The subdivision in our example isneither in accordance with the land use plannor with the prohibition against building in

18. See Williamson et al. (2010) for a deeper understanding of land administration systems and their benefits.




the 100-meter belt. Hence, the landownerneeds a dispensation and the public adminis-tration must perform a means test before giv-ing its approval or refusal.

For the public administration, it can be ofinterest to build up social capital in order togain trust. On the individual level, socialcapital is the «sum of the numbers of socialcontacts multiplied by the quality of trust inthese relationships» (Rothstein 2005:66).The social capital in an organization, Roth-stein continues, «is determined by (a) the ex-tent of social contacts and networks that peo-ple have on average and (b) the extent towhich people generally believe that they cantrust most of those contacts.» The conclusionis that an organization with many trusth-worthy people gives the organization a great-er social capital. If the public administrationdoes not treat aplications for dispensationequally the local community may start tomistrust it. The public administration canget a bad reputation in the local communityor in the higher administrative authorities,as the County Governor (Fylkesmannen).The municipality can also get a rebuke fromthe Parliamentary Ombudsman. For a publicadministration that gives too many dispen-sations or one that is too strict there are noreal sanctions beyond this. One possible out-come is that this system may end up in a so-cial trap. Because of mistrust and inconsist-encies in the use of discretion. This would bean interesting area to pursue.

DiscussionThe rules for dispensation are a mix of for-mal and informal institutions. To explain theevolution of dispensation as an institution Iwill start by saying that it is a part of a cor-porate culture. Nevertheless, people from anepistemic community can be hired and influ-ence the understanding of the rules in thecorporate culture. In this way, they can pro-vide new knowledge for the corporate culturethat may change it. The corporate culture re-fers to the shared values, attitudes, stand-ards, and beliefs that characterize membersof an organization. In the context of subdivi-sion of real property, the municipality is botha part of the institution as the guardian of

the rules and an organization with its owncorporate culture.

Factors that influence how the public ad-ministration deals with applications for dis-pensation may be colleagues, internal proce-dures, epistemic communities, acts and reg-ulations, statements by the Ministry of LocalGovernment and Modernisation, political de-cisions (both on national and local level), thelocal community, and the involved parties.

To understand dispensation as an institu-tion we will analyze it using the InstitutionalAnalysis and Development (IAD) Frame-work developed by Ostrom. The IAD modelhelps us to understand how the processing ofan application for dispensation functions asan action arena. According to Ostrom(2005:186) there are different ways of classi-fying rules, and this way can be «a useful sys-tem for those interested in linking rules andthe action situations created by rules, the bi-ophysical world, and communities.» Figure 4shows a simplified presentation of what is ahigh complex process.

In the figure, Ostrom (2005:15, 2011:10) isintroducing us to positions. These are combi-nations of the roles of the actors and possibleactions. In figure 5 these are the owner, thepublic administration, and the consultingauthorities. In their positions, they have toobtain information and they can have somekind of control. Like the owner, who knowsthat he or she has to submit a complete ap-plication, but it is their own choice whetheror not they do so. The owner controls whatkind of information he or she will provide.Then the public administration must gothrough the application and see if it is possi-ble to grant dispensation. If so, it must sendthe application to the consulting authorities.In this part of the process, the public admin-istration must say something about this casein relation to similar cases and provideenough information so that the consultingauthorities can reach an opinion. After goingthrough the different stages of the process,there are in the end only two potential out-comes: approval (and approval subject to cer-tain conditions) or rejection of the applica-tion. The considerations made by the publicadministration are based on all the informa-tion obtained in the process. «In the assess-




ment of whether dispensation from plansshould be granted, central government andregional frameworks and goals must be as-signed particular importance. [They should]

not grant dispensation where a directly af-fected central government or regional au-thority has expressed a negative view on theapplication for dispensation» (section 19-2).

Figure 4: Using the Institutional Analysis and Development (IAD) framework to analyse localtreatment of applications for dispensation. The model is based on Ostrom’s IAD framework(Ostrom 2005:15, 2011:10).

Figure 5: A closer look at the action situation of local processing of applications for dispensa-tion based on the model of the internal structure of an action situation (Ostrom 2005:33,2011:10). It is possible to expand the figure into different action situations, like one for the con-sultation process and one for the processing by the public administration. As Ostrom pointsout, it can be difficult to see where one action situation ends and another starts.




Concluding remarksRidderstrøm (2015:119) says that thestrength of institutional theory is that itgives a framework to interpret and under-stand the actions of the actors. In the case ofdispensation, institutional theory has nowbeen used to investigate how dispensation insubdivision of real property can be interpretand understood in the action situation of lo-cal processing of the application. It appearsthat institutional theory can be useful in de-scribing the current situation, using the IADframework.

For the public administration, it may beappropriate to apply a pragmatic approach(logic of appropriateness) to the applicationof rules on granting dispensation. Peters(2012:27) describes this as a concept in thenormative institutionalism where the partic-ipants in the organization have a commit-ment to the goals of the organization or atleast an acceptance of them. This corre-sponds to the case where an employee of theadministration may argue that practiceshould be stricter, but political goals and theorganization's common sense suggest a moreliberal approach. As we saw in the resultsfrom the questionnaire, political goals aretaken into consideration in the process.

When it comes to the actual case of dispen-sation given in this paper, institutional theo-ry gives a useful perspective on how theserules, norms and regulations are used, andevolve. To get a better insight into the rele-vant actions of the actors, in this case thepublic administration, a more descriptivemethod must be used.

AcknowledgmentThanks to Hans Sevatdal and Erling Bergefor introducing me to institutional theoryand to Berge for guiding me through thisfirst step towards using institutional theoryin my work on my PhD project.

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