Intermunicipal cooperation and agreement formalization

ABSTRACT

We explore the effects of agreement formalization and partners on cooperation costs in twelve local government services in New York State. Our survey differentiates agreement formalization (informal, memorandum of understanding, joint production, contracting and special districts) and controls for cooperation duration and non-profit partners. Cost data (1996–2016) enable panel models which find agreement formality often has no effect on costs. Non-profit partners typically reduce costs. Formality is associated with higher costs in services where quality improvements are sought, and lower costs where formality shifts budget authority. In general the costs of formality appear to be balanced by savings over time.

KEYWORDS:

• Intermunicipal cooperation
• local government
• shared services
• service delivery

JEL CLASSIFICATION:

• H77
• H75
• H41
• I3

Acknowledgments

The authors would like to thank the New York Conference of Mayors, the Association of Towns of New York States, and the New York State Association of Counties for cooperating on the shared services survey.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This work was supported by the USDA National Institute of Food and Agriculture (NIFA) under Grant #2021-67023-34437 and USDA Hatch Multistate Project W5001.