Incentive Contracts in Norwegian Local Public Transport: The Hordaland Model

In Hordaland county in Norway, performance-based contracts between the transport authority and the bus operators were signed in year 2000. This paper will investigate the development of this particular contractual type. Apart from a more limited performance-based contract in Oslo, Hordaland was the first county in Norway to adopt a principle of performance-based contracts. The key characteristic of the performance-based contract is that the subsidy is determined by the level of service provided.