:Voluntary cooperative arrangements are increasingly being established among local governments for economic development purposes. This article extends the institutional collective action framework to economic development to investigate the conditions under which local government units overcome transaction costs to establish joint ventures. Data were derived from a survey of intergovernmental relations for 206 local governments with a population of 10,000 or more in 12 metropolitan areas. The findings of a logistic regression analysis indicate that endogenous resources, such as cooperative norms and trust, as well as the local and regional context, influence cooperation.
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