Interlocal Agreements and Multilateral Institutions: Mitigating Coordination Problems of Self-Organized Collective Action

Abstract

In the United States, competition among cities for economic development tends to be the norm. Cities are also collaborating more to improve their economic advantage. However, transaction costs inhibit various of interlocal agreements from being formed. This study examines the role of multilateral institutions in facilitating interlocal agreements for economic development. An analysis of survey data collected from city governments in eleven US metropolitan areas highlights the importance of regional institutions in moderating the effect of coordination problems on the formation of developmental joint venture agreements. The findings complement extant research on the governance mechanisms that mitigate transaction costs of collective action.

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