How and why did the Swedish Academy decide to award Bob Dylan a Nobel Prize?

Question

Setting aside the question of whether the award was appropriate/merited, why did the Swedish Academy award Bob Dylan a Nobel Prize? What is publicly known about how and why they made that decision?

Answer 1

The records of the discussions of the Swedish Academy are kept secret for 50 years, meaning that as of the time I'm writing this, the last laureates for which we actually have any real insight into the discussion that took place prior to the awards are Nelly Sachs and Samuel Josef Agnon, who shared the prize in 1966.

For later laureates, we basically have two sources:

1. The official reason given by the Academy, in this case "for having created new poetic expressions within the great American song tradition".
2. What individual members of the academy, or other people with potential insight, have said.

I've found one interview with Academy member Anders Olsson in Dalarnas Tidningar, which at leasts shows that Olsson appears to be pleased with the choice. He, among other praise, mentions "the musicality and depth of the poetry", and lauds Dylan for "baffling intensity" and "natural and beautiful rhymes". Olsson is also a member of the Nobel Committee that does a lot of the preporatory work, so his answer should carry weight. Another member is Horace Engdahl, who in this interview gave his own reason: "[Dylan's] poetry is thoughtful but never constructed." (I'm paraphrasing a bit here).

Beyond sources such as these, unlikely to show displeasure with the choice, there is only speculation. All we can be sure of is that at least nine members of the Academy (there are nominally eighteen, one is not participating in the work, and a majority is necessary) thought this was a good enough choice.