The present paper discusses the geographical distribution of physicians employed in municipal primary care. In Norway, primary medical services are the responsibility of the local public authority (the municipality) and are financed primarily by the general taxation. The allocation of physicians is analysed using a municipal demand model. The model is a synthesis of consumers' demand and allocation of municipal funds. Analyses were performed on a panel data set of all Norwegian municipalities covering the period 1986-92. The results are encouraging, since they indicate that a decentralised system of primary medical services does seem to be fairly effective in securing the municipal population equity of access to the services. In particular, the municipalities seem to respond well to the health care needs of their population. Distribution of physicians depends to only a very small extent on the wealth of the municipality.