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Political incentives and transaction costs of collaboration among US cities for economic development

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  • Christopher V. Hawkins

Abstract

This study extends research on Institutional Collective Action by testing a transaction cost explanation for self-organising economic development agreements between US cities. We offer a unique contribution to this literature by identifying how these agreements between cities with similar political institutions mitigate the transaction costs of collaboration, and how characteristics of these agreements combine with political institutions to shape collective action. The results of an empirical analysis of data collected through a survey of local officials suggest the alignment of high-powered political incentives between cities mitigates the coordination and division problems of forming a joint venture. Agreements that enable elected officials to distribute the benefits of an agreement are also found to moderate this effect.

Suggested Citation

  • Christopher V. Hawkins, 2017. "Political incentives and transaction costs of collaboration among US cities for economic development," Local Government Studies, Taylor & Francis Journals, vol. 43(5), pages 752-775, September.
    • Handle: RePEc:taf:flgsxx:v:43:y:2017:i:5:p:752-775
    DOI: 10.1080/03003930.2017.1337568
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    Cited by:

    1. Ivo Bischoff & Simon Melch & Eva Wolfschuetz, 2019. "Does tax competition drive cooperation in local economic development policies? Evidence on inter-local business parks in Germany," MAGKS Papers on Economics 201906, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    2. Eva Wolfschuetz, 2020. "The Effect of Inter-municipal Cooperation on Local Business Development in German Municipalities," MAGKS Papers on Economics 202005, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    3. Germà Bel & Marianna Sebo, 2018. "“Does inter-municipal cooperation really reduce delivery costs? An empirical evaluation of the role of scale economies, transaction costs, and governance arrangements”," IREA Working Papers 201816, University of Barcelona, Research Institute of Applied Economics, revised Jul 2018.

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