Tavares Feiock 2017

Perspectives on Public Management and Governance, 2017, 1–18
doi:10.1093/ppmgov/gvx014
Article
Article
Applying an Institutional Collective Action

Framework to Investigate Intermunicipal
Cooperation in Europe
Antonio F. Tavares,*,† Richard C. Feiock‡
*University of Minho; †United Nations University; ‡Florida State University
Address correspondence to the author at atavares@eeg.uminho.pt.
Abstract
Over the last few decades, European countries have dealt with problems of regional governance
in very different ways. A common theme is the debate between supporters of local government
mergers to expand the capacity and efficiency in service provision and those favoring local gov-
ernment autonomy and self-determination to protect democracy and government responsiveness.
The significant number of scholarly contributions to this debate between mergers and fragmen-
tation contrasts with the scarcity of theoretical attention to decentralized self-organizing mecha-
nisms. This article fills this lacuna by developing an extension of the Institutional Collective Action
(ICA) framework for the European context. The framework defines two dimensions to understand
intermunicipal cooperation: the type of urban integration mechanism (imposed authority, dele-
gated authority, contracts, or social embeddedness) and the degree of institutional scope (nar-
row, intermediate or complex). The resulting typology composed by 12 cells is illustrated with
examples of intermunicipal cooperation for solving governance dilemmas in the European setting.
We advance theoretical propositions rooted in historical, cultural, and institutional differences to
explain the variation in the adoption of intermunicipal cooperation by Northern versus Southern
as well as Eastern versus Western European countries. A research agenda using the ICA framework
is advanced for framing the studies of regional governance in Europe.
Institutional Collective Action (ICA) dilemmas arise Over the past 60 years, European countries dealt
when fragmentation of political authority leads two or with problems of regional governance and ICA in
more municipalities in a region or metropolitan area very different ways, both across space and over
to make individual decisions that lead to inferior col- time. Urban governance debates often pit support-
lective outcomes than would be obtained if they acted ers of local government consolidation to expand the
together (Feiock 2013). These dilemmas are ubiquitous. capacity and efficiency in service provision against
Two municipalities failing to coordinate efforts to pro- those favoring local government autonomy and self-
vide solid waste collection services to their residents, determination to protect democracy and respon-
the decision to locate a wastewater treatment facility siveness to citizens. The sizable body of scholarly
in a metro area or managing a watershed shared by contributions to this lively debate contrasts with the
several jurisdictions are just a few illustrations of the sporadic theoretical attention and empirical assess-
kind of collective action dilemmas faced by municipali- ment of self-organizing solutions for regional gov-
ties in a regional setting. ernance in Europe.
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2 Perspectives on Public Management and Governance, 2017, Vol. XX, No. XX
This work proposes the extension of the ICA Following this global trend, many European coun-
framework to the analysis of regional governance tries have searched for increased capacity, economies
across European countries. In doing so we ask, what of scale, and efficiency by resorting to mergers of
are the characteristics of intermunicipal governance their local government units, whereas in others the
in Europe? What factors explain the choice between promotion of democracy, legitimacy, and responsive-
different mechanisms of cooperation between munici- ness produced smaller units and more fragmented
palities? The framework is employed to answer these local government systems (Kopric 2012; Swianiewicz
questions and to frame policy choices for solving ICA 2010). However, in this debate between consolidation
dilemmas by presenting and discussing the transaction and fragmentation reforms, intermunicipal cooper-
costs and collaboration risks associated with alterna- ation has only received significant attention during
tive intermunicipal cooperation solutions.1 the past decade (Bel and Warner 2016; Hulst and Van
The nature of the problems faced by local govern- Monfort 2007a; Swianiewicz 2010; Teles 2016). Even
ments in European countries is in some respects com- though voluntary cooperation has been implemented
mon to many other areas of the globe. The worldwide as an alternative way to implement functional decen-
movement of decentralization and devolution processes tralization, self-organizing intermunicipal governance
from central to local governments stimulated by inter- is usually regarded as uncommon and problematic.
national organizations such as the World Bank or the Swianiewicz (2010) refers to intermunicipal cooper-
United Nations has been thought to strengthen democ- ation efforts, but the discussion of voluntary solutions
racy and facilitate context-specific delivery of public to collective action dilemmas in Europe is largely dom-
services, while often creating challenges in capturing inated by a top–down perspective. Even when central
economies of scale. However, the responses to ICA governments wish to promote bottom-up, voluntary
dilemmas have been remarkably different across coun- solutions, they still set up the criteria to be followed in
tries and geographical regions. For example, whereas municipal mergers and intervene by imposing bound-
consolidation in metropolitan areas is a relatively rare ary changes when voluntary solutions fail to deliver.2
event in the United States, many Western European The integration of the debate concerning local gov-
countries have successfully engaged in large-scale ter- ernment consolidation and fragmentation in Europe
ritorial reforms. In contrast, in Central and Eastern with intermunicipal cooperation alternatives remains
Europe, the large majority of the so-called transitional incomplete, despite recent efforts addressing this
countries fragmented their local government struc- issue (Hulst and van Monfort 2007a; Swianiewicz
tures during the 1990s to promote local democracy 2010; Teles 2016; Teles and Swianiewicz 2018). The
as a reaction to territorial consolidations imposed ICA framework provides an integrative approach to
under former communist regimes (Swianiewicz 2010). understand the variable geometry of intermunicipal
Another trend resulted from the European integra- cooperation across European countries. The prefer-
tion efforts of the past three decades with crossbor- ence for formal and hierarchical solutions is a domi-
der cooperation becoming a major issue of interest, nant feature in the European setting that still puzzles
both for researchers and practitioners (de Sousa 2013; American scholars seeking to comprehend the choice
Szmigiel-Rawska 2016). Elsewhere, many of Latin of governance arrangements to address specific ICA
America’s largest metropolises face significant govern- dilemmas. In this article we suggest that the variation
ance challenges due to excessive fragmentation (e.g., in the constitutional-legal framework, local institu-
Mexico City, São Paulo, Buenos Aires, and Santiago), tions and preferences, homophily within and between
with monocentric metropolitan regions constituting communities, and the interaction between possible
the exception, either by intentional design (Lima’s met- governance mechanisms affects the transaction costs
ropolitan government) or by historical dominance of faced by local authorities attempting to establish inter-
the central city (Bogotá) (Nickson 2011; Frey 2014). municipal cooperation. Although some of these factors
Several Australian states have engaged in significant are common to the US and European settings, institu-
mergers in search for economies of scale with deleteri- tional diversity resulting from historical, cultural, and
ous consequences for the exercise of democracy (Drew constitutional-legal factors explains most of the varia-
et al. 2016; Drew and Dollery 2017) and similar trends tion across countries in Europe. Focusing on historical,
have been reported in Japan (Mabuchi 2001; Yamada cultural, and constitutional factors extends the scope
2016) and Canada (Cobban 2017; Sancton 2000). and generalizability of the ICA framework.
1 The article uses the terms “regional governance” and “intermunicipal 2 See Vrangsbaek (2010) for the Danish case, Hlepas (2010) for the Greek
cooperation” interchangeably to denote all voluntary solutions to reform, and Tavares and Rodrigues (2015) for the reform of Portuguese
collective action dilemmas at supra-municipal level. parish governments.

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Perspectives on Public Management and Governance, 2017, Vol. XX, No. XX 3
Factors that help explain the success and failure of scope. In the fifth section, we identify how the nature
territorial reforms in Europe over the past 60 years and degree of transaction costs associated with com-
justify the differences in the adoption of self-organ- munity characteristics and the collaboration risks
izing solutions for collective action dilemmas across derived from the ICA dilemma faced by local authori-
European countries. In some countries it has been pos- ties influence the choice and adoption of ICA mecha-
sible to dilute local boundaries to the point of merg- nisms. Section six illustrates the ICA framework by
ers between municipalities and accomplish large-scale providing examples of the tools of intermunicipal
territorial changes, whereas in others, local boundaries cooperation employed in different European coun-
still represent a barrier to both amalgamations and tries. A research agenda for the study of intermu-
cooperation among local governments. The four com- nicipal cooperation in Europe based in the ICA is
ponents of the ICA framework highlighted here are: advanced in the conclusion.
1. The nature and variety of ICA dilemmas: (a) coor-
Intellectual Tradition of the ICA Framework
dination problems, such as the ones involved in
two municipalities attempting to coordinate traf- The ICA framework has been shaped by theory devel-
fic lights; (b) division problems, for example, those oped in several disciplines of the social sciences. This
associated with the division of benefits and costs section identifies the collective action literature, the
between the municipalities involved in setting up theory of local public economics, transaction costs
a regional agency to provide fire services; and (c) analysis, theories of social embeddedness, and the pol-
defection problems, typically associated with one of icy tools literature as the theoretical foundations upon
the parties reneging on an intermunicipal coopera- which the ICA edifice is built.
tion agreement; The ICA framework is rooted in the collective
2. The key dimensions of the analysis: (a) the type action literature showing that common interests and
of integration mechanism of local governments goals are insufficient to achieve successful collective
(social embeddedness, formal contracts, stand- action (Olson 1965). The ICA extends this individu-
alone organizations established through delegated alistic logic to composite actors defined by position,
authority from the municipalities or top–down authority, and aggregation rules for collective decision
cooperative arrangements imposed by an upper making (Ostrom 1990, 2005).
level government or authority; (b) the level of insti- Local economies tend to be fragmented, polycentric,
tutional scope of the intermunicipal arrangement, and composed of production units and provision units.
which can vary from a bilateral interlocal arrange- This requires governance institutions, that is, the ability
ments (two local governments and one single policy to formulate, modify, and enforce rules through which
issue) to collective (multilateral and multiple policy provision and production are accomplished (Ostrom
issues); 1989; Oakerson 2004; Oakerson and Parks 2011;
3. The transaction costs involved in setting up the Ostrom, Tiebout, and Warren 1961). ICA extends the
cooperative arrangement which stem from the char- local public goods theory’s focus on polycentrism as
acteristics of the arrangement itself3 and from the “a process of decision making whereby multiple inde-
collaboration risks associated with the three types pendent actors interact to produce an outcome that
of problems mentioned in (1); is commonly valued” (Oakerson 2004, 21; Ostrom,
4. The policy mechanisms for integrating fragmenta- Tiebout and Warren 1961). The resulting pattern of
tion and their effectiveness in dealing with the ICA governance involves the interaction of multiple inde-
dilemmas. pendent actors in a regional or metropolitan setting
where no center of authority exercises dominance over
The article is structured as follows. The second sec- the others. A polycentric local political system involves
tion presents the intellectual roots of the ICA frame- multiple decision-making centers, and to the extent that
work. Section three discusses the nature and diversity competition and cooperation efforts develop between
of ICA dilemmas. The fourth section describes the the various jurisdictions in the metropolitan area, these
two dimensions of the ICA framework—the type of units are able to offer a wider range of goods, services,
integration mechanism and the degree of institutional prices, and alternatives from which citizens can choose
(Ostrom et al. 1961).
3 The design, implementation and monitoring of cooperative Choices among alternative service delivery mecha-
arrangements (or policy instruments) entails specific transaction costs, nisms are largely determined by the transaction costs
which tend to vary according to their level of complexity. In theory, a associated with the exchange (Brown and Potoski 2003).
bilateral agreement between two municipal governments to provide
solid waste collection services involves significantly less transaction
Transaction costs economics identifies the costs associ-
costs than a multi-purpose intermunicipal association involving ten ated with the exchange of goods or services between a
local governments. provider and a user. Transaction costs analysis assumes

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boundedly-rational actors and opportunism are pre- governments ceding power to a regional authority to
sent in contractual agreements. As a result, contracts achieve benefits for the community and foregoing these
involve both ex-ante costs associated with information benefits to retain local control over policy. In order to
and search costs, bargaining and negotiation costs, and overcome this trade-off, local government officials
ex-post costs linked to agency costs and enforcement must “consider the expected regional benefits and costs
costs. The ICA framework argues that the choice of of the policy, the expected local benefits and costs, and
mechanisms to overcome collective action dilemmas how those compare to the likely political costs asso-
faces transaction costs that limit self-organizing efforts ciated with delegating power to the region.” (Gerber
(Feiock 2013). and Gibson 2009). For example, the transfer of powers
Theories of social embeddedness suggest that inter- and responsibilities for service provision to a metro-
governmental relationships are embedded in larger politan government, an association of municipalities
social, political, and economic structures (Feiock or an intermunicipal company may produce economies
2013; Granovetter 1985). The geographical immo- of scale and improve technical efficiency, but it also
bility and proximity between local government units generates some loss of control by the municipalities
creates opportunities for the establishment of dense engaged in this upward transfer of powers.
tightly-clustered network relationships that promote Incentives for voluntary local agreements vary
social capital, breed trust and reciprocity, and mini- depending on the nature of the problems to be handled,
mize opportunism (Berardo and Scholz 2010; Gulati the geographic configuration of local governments, the
1995). The presence of these elements in regional size of the group involved in the solution, the avail-
contexts explains the development of successful ability of public entrepreneurs to promote the solution,
self-organizing solutions to collective action dilem- and the statutory framework for local government
mas that are not captured through transaction cost cooperation (Feiock and Carr 2001; Feiock 2009; Post
economics. Social embeddedness helps to mitigate 2004). One challenge to extending the framework to
opportunism because long-term interaction builds the European context is to account for how different
reputation among potential partners and prevents national institutional contexts structure the configura-
untrustworthy behavior. tion and the preferences of the actors, the selection of
The policy analysis literature directs our attention the tasks for collective action, and the arrangements
to choices among the generic policy instruments and available to solve collective action dilemmas (Andersen
specific mechanisms that governments use to pursue and Pierre 2010; Feiock 2009; Hulst et al. 2009).
their policy goals (Linder and Peters 1989; Peters and Technical or productive efficiency is achieved either
Van Nispen 1998; Salamon and Lund 1989; Salamon by obtaining the greatest output for a fixed amount
and Elliott 2002). There is an array of policy tools to of resources or by getting a given amount of output
integrate collective action dilemmas and the choice can for a minimal amount of inputs. Allocative efficiency
be casted as a dynamic political contracting process increases when more individuals receive the type
among local officials representing each local govern- and level of service they prefer (Dowding and Feiock
ment unit (Feiock et al. 2008; Lubell et al. 2005). 2012). In Europe, the rational design of regional gov-
ernance systems in the second half of the 20th century
favored large-scale mergers on the grounds of technical
The Nature and Diversity of the ICA Dilemmas efficiency. Mergers allowed municipalities to lower the
Recent work in European settings highlights problems cost per unit of output (economies of scale) and the
of scale as the main driver of inter-municipal coopera- average cost of producing more than one product or
tion (Hulst et al. 2009), but neglects horizontal dilem- service (economies of scope) (Dente and Bennett 1989;
mas associated with the fragmentation of authority Brans 1992; Kjellberg 1988). The significant gains in
such as the management of common-pool resources, technical efficiency allowed by mass-scale mergers were
positive and negative externalities, and free-riding seen as decisive in the context of the expansion of the
in the delivery of public goods. A horizontal ICA welfare state, fast pace urbanization, and functional
dilemma occurs when the fragmentation of authority decentralization. However, large-scale mergers sacri-
at the regional level generates local governments either fice allocative efficiency because merged governments
too small to produce the services they wish to provide are less able to adjust service provision to local pref-
(a scale problem) or decisions by independent authori- erences (Dowding and Feiock 2012). Intermunicipal
ties that affect unconsenting third parties (an external- cooperation arrangements overcome this drawback by
ity problem). In the presence of such collective action accommodating local preference diversity. They can be
dilemmas, local authorities’ pursuit of their short-term tailored to each good or service and adapted to each
interests may lead to inefficient and unwanted out- particular context, thereby avoiding irreversible solu-
comes. However, there is a trade-off between local tions such as mergers. The ICA framework illustrates

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the trade-offs between technical and allocative effi- be lower; these costs increase as the number of players
ciency to better understand the motivations for the and the number of tasks involved increase.
choices of alternative governance arrangements. The horizontal axis in figure 1 displays four integra-
tion mechanisms: Network embeddedness; contractual
agreements; delegated authority; and imposed author-
The Dimensions of the ICA Framework: ity (Feiock 2013). This dimension is assessed in terms
Integration Mechanisms and Institutional of autonomy costs. Any kind of cooperative arrange-
Scope ment entails sacrificing some degree of local autonomy
Intermunicipal arrangements can be compared (Holum 2016), because each municipality is effectively
according to the type of integration mechanism and “hollowing out” its power and legitimacy (Jacobsen
the level of institutional scope. The vertical axis on 2015). More formalized policy mechanisms involve
figure 1 defines the degree of complexity of solu- significant transfers of powers from the parent munici-
tions to ICA dilemmas and is assessed in terms of palities to the contract or organization specifically set
decision-making costs. These include both the costs up for cooperation. The extreme case is the municipal
involved in the design and negotiation of a collab- merger, where the municipality ceases to exist as an
orative agreement capable of overcoming collect- autonomous entity.
ive action problems associated with the number of The first three mechanisms are decentralized gov-
actors (Olson 1965; Provan and Kenis 2008) and ernance solutions involving self-organization by local
the costs involved in managing task diversity and government units in order to overcome horizontal
complexity (Holmström and Milgrom 1991; Tadelis collective action dilemmas. Network embedded-
2002). Complexity increases with the number of local ness mechanisms rely on norms of trust, reciprocity,
authorities and the number of tasks involved (Feiock and reputation resulting from long-term interaction
2013). The cells in the bottom row include solutions between local actors to elicit credible commitments
involving only a few local authorities and a narrower from the institutional actors involved in the exchange.
policy focus. Informal networks, bilateral contracts, The autonomy of each local government unit is not
and municipal companies are examples of such mech- threatened, since these solutions are informal and have
anisms. Governance arrangements of broader scope low impact on the structure of local units.
involve a large number of actors and cover multiple Contractual agreements represent an increase in
policy functions. City-regions, multi-purpose munici- the level of formalization for solving ICA dilemmas.
pal associations, and intermunicipal companies have Contracts are voluntary in nature and can be adopted
intermediate institutional scope, whereas social net- in many situations involving externalities as long as
works, voluntary mergers, and regional authorities are the transaction costs involved in designing, negotiat-
complex and large institutional scope solutions. When ing, and enforcing the agreement are kept low (Coase
the intermunicipal cooperation mechanism adopted 1960). Both bilateral and multilateral contracts can
has a narrower scope, decision making costs tend to include exit provisions to avoid the perception of
Higher
Encompassing
Transacon
Complex
Costs
Collecve
---Desision Costs+++
Intermediate
Mullateral
Narrow Lower
Single Purpose Transacon
Bilateral Costs
Delegated Imposed
Embeddedness Contracts
Authority Authority
---Autonomy Costs + + +
Figure 1. Integration Mechanisms and Transaction Costs.

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loss of autonomy by the parties that could prevent an Collaboration risks include coordination search, “the
agreement from being reached. Contracts produce sav- risk of not being able to coordinate on a course of
ings on start-up costs and do not require the establish- action,” division, “not being able to agree to division
ment of a system of governance as in the creation of of costs despite agreeing on the action”; and defection,
joint organizations (Hulst et al. 2009). “the risk that once action is agreed upon, others may
Under delegated authority, local government units renege or free ride” (Feiock 2013, 408).
agree to set up a stand-alone organization to which Relational uncertainties regarding the intentions
they delegate functional authority to perform certain and commitment of other actors produce collabora-
activities on behalf of the local governments. This is tion risks. The concept of collaboration risk builds
the most organizationally integrated form of coopera- from the insight that voluntary exchanges among
tion as it entails the integration of activities formerly governments are subject to uncertainties leading to
carried out individually by municipalities into a new problems of inaction (incoordination), benefit and cost
organization (Hulst et al. 2009). The loss of autonomy division issues and defection by one or more parties
involved in the delegation of authority depends on the to an agreement. Coordination risks arise when local
type of property and governance structure adopted by governments find it in their interest to act together, but
the newly created organization. fail to do so due to incomplete information. Division
Imposed authority is a centralized solution designed risks occur when local government officials agree on
by a higher level authority to direct the actions of local general goals, but not on who bears what costs, par-
units and internalize ICA dilemmas (Feiock 2013). ticularly when resources are unevenly distributed
Municipal mergers and the consolidation of several (Heckathorn and Maser 1987). Defection risks derive
general-purpose local governments into a single met- from the potential for opportunistic behavior when
ropolitan area government are examples of centralized participants free ride or do not honor their obligations.
mechanisms employed to forcefully solve collective Relational uncertainty is also a function of the per-
action dilemmas. Unlike the other three types of inte- ceptions of other actors and intentions, commitment,
gration mechanisms, imposed authority is not based and trustworthiness. Most collaboration risks expe-
on the endogenous development and maintenance of rienced by participants in collective dilemmas can be
self-organizing institutions, but rather the result of accounted for by three factors: the nature of the prob-
exogenous pressures to adopt consolidated solutions, lem; the characteristics of participating actors, and the
which ultimately entail the end of the local unit as an existing set of institutions and integration mechanisms.
autonomous entity. In the ICA approach, participants discount the benefits
of collaboration according to the degree of uncertainty
they have regarding others collaboration behavior.
Transaction Costs and Collaboration Risk
Uncertainty can result from community character-
This section discusses how the nature and degree of istics and institutional settings. These include: (a) the
transaction costs associated with community char- incentives for and/or limits to intergovernmental agree-
acteristics and the collaboration risks derived from ments defined in the constitutional-legal framework and
the ICA dilemma faced by local authorities influence in local level institutions and rules; (b) preference homo-
the choice and adoption of ICA mechanisms. The geneity within the community and between communi-
choices of governance mechanisms to overcome ICA ties regarding these agreements; and (c) the interaction
dilemmas depend upon the transaction costs faced between different types of intergovernmental solutions
by local authorities pursuing joint or collective out- adopted by the communities. Collaboration risk is also
comes. Extant public administration studies of col- connected to the nature of the ICA dilemmas itself:
laboration emphasize transaction costs. Much of the coordination problems entail information costs, division
application of transaction costs in that literature problems involve bargaining and negotiation costs, and
focuses on differences in autonomy and decision defection risks require enforcement provisions and costs
costs (Feiock and Scholz 2010; Feiock 2007, 2013). (Feiock 2013). Local officials decide between alterna-
Thus, these two dimensions are represented as the tive mechanisms to overcome ICA dilemmas, seeking
axis of figure 1. mechanisms which will effectively produce the collect-
Feiock and Scholz (2010) supplement the transac- ive benefit with the lowest decision costs and greatest
tion cost framing by introducing the concept of col- autonomy, but collaboration risks that reduce the like-
laboration risk. Collaboration is risky because it can lihood the preferred mechanisms will be effective, lead
fail in several ways and behavioral dispositions serve participants to sacrifice autonomy and decision costs.
as barriers to resolving search, division, and defec- This section elaborates on the transaction costs and col-
tion problems necessary to ensure success in collabor- laboration risks involved in setting up regional govern-
ation (Feiock 2004, 2013; Carr and Hawkins 2013). ance solutions to overcome ICA dilemmas.

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Constitutional-Legal Framework The degree of functional and territorial decentrali-

The national legal framework has direct implications for zation is shaped by the constitutional-legal tradition
the economic and political transaction costs of mecha- of a country and operationalized through policies and
nisms to mitigate ICA dilemmas. Collaboration deci- administrative practices. Because task decentralization
sions are conditioned by upper level rules that become varies according to the constitutional-legal traditions
the constitutional set up within which self-governance of different countries in Europe, the choice of mecha-
is organized and exercised (Parks and Oakerson 1989). nisms for regional governance reflects the variations
When interlocal cooperation faces constraints imposed in the constitutional-legal framework (Hulst and van
by national legislation, other solutions, including full- Monfort 2007b). For example, inter-municipal coop-
scale mergers, become more attractive from a bene- eration in Scandinavian countries is focused on solv-
fit-cost perspective. Hulst and van Monfort (2007a) ing complex problems and improving the legitimacy
provide evidence that many local governments in of redistributive policies adopted and implemented by
European countries, including Finland, Germany, and the municipalities. In contrast, the Southern European
The Netherlands, resist vertical intergovernmental cluster is mainly focused on infrastructure and public
agreements to allow self-organizing solutions. In con- utilities (Bel et al. 2013; Citroni et al. 2013; Haveri
trast, legislation that facilitates self-organizing regional et al. 2009). Thus, the choice of instruments for inter-
governance reduces collaboration risk. municipal collaboration reflects the functional respon-
In general, this argument refers to state traditions sibilities and powers assigned to local governments by
and culture embedded in the constitutional-legal the constitutional-legal framework.
framework of a country. Like administrative reforms,
territorial reforms are the product of cultural values Proposition 1a: Countries with a longer tradition
and state traditions (Loughlin and Peters 1997; Ross of a constitutional-legal framework favouring
1997). Scandinavian countries are frequently described decentralization and self-government facilitate
as having decentralized political organization, consen- the adoption of less formal mechanisms for
sual policy-making, and organicist state-society rela- regional governance (cells on the “embedded-
tions (Loughlin and Peters 1997, 46). These features ness” column on figure 1).
facilitate both processes of territorial mergers and Proposition 1b: Countries with a longer trad-
voluntary solutions to dilemmas of ICA. In contrast, ition of a constitutional-legal framework
countries in the Napoleonic tradition are characterized favouring centralization and administrative
by long standing local government boundaries, where law prefer the adoption of regional governance
parochial interests dominate local politics. These mechanisms based on formalization (cells on
countries have witnessed the reproduction of legalis- the “contracts” and “delegated authority” col-
tic behaviors conducive to the reinforcement of exist- umns on figure 1).
ing parochial attitudes and political boundaries in the
long run. In addition, state-society relations are seen as Local Institutions and Preferences
antagonistic, which also does not fuel trust relations Preferences for cooperation are influenced by a coun-
among actors (Loughlin and Peters 1997). try’s history, culture, and traditions in which they are
As a result of these state traditions, vertical intergov- embedded. Countries where local governments display
ernmental relations have taken a different path, both a more social capital ties expressed in local autonomy,
product of history and democracy. In Greece, Portugal, local networks, and the involvement of civil society
Spain, and CEE countries, the absence of democracy organizations will be able to adopt more complex
facilitated the minimization of the role of local gov- self-organizing governance mechanisms (Granovetter
ernments by national governments, demonstrated by 1983; Hall et al. 2009). Interlocal cooperation is com-
heavy financial dependence and appointment of local promised when local government actors are embedded
level officials. When democracy was re-established, in networks characterized by close-knit relationships
local autonomy and complete control over municipal because they will be unable to mobilize effectively for
boundaries were so fundamental to advocates of decen- collective action across multiple municipal boundaries.
tralization, that any attempts at merging municipalities The result will be a fragmented local government sys-
or even forcing inter-municipal cooperation were seen tem in which ICA is much more difficult to accomplish.
as politically unfeasible or undesirable. Even in coun- The greater and more diversified connectivity allowed
tries where democracy prevailed for a long period, by weak ties improves the ability of local govern-
such as France or Italy, similar trends occurred as a ments to solve collective action dilemmas using hori-
result of excessive centralization, because local actors zontal networks, thereby reducing their dependence
resisted the interference of the central government in on upper level governments to do so (Crenson 1978;
local politics and territorial organization. Granovetter 1983; Shami 2012).

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The internal organization of communities in Southern Community Homogeneity

Europe is largely based on social ties that have persisted Local elected officials are involved in principal-agent
into the 21st century. The prevalence of hierarchical relationships, since they represent their citizens in the
networks of various kinds has precluded the rise of decision to participate in self-organizing mechanisms
both vertical state authority and horizontal interlocal for regional governance. Their efforts to overcome
cooperation. Several examples fit this pattern, including collective action problems may be dampened by the
patron-client relations (caciquismo) in Portugal and the heterogeneity of the preferences and goals of local con-
mafia (Cosa nostra) in Italy. These strong ties created stituencies (Feiock 2009). Homogeneity within each
closely-knit communities but were the least effective jurisdiction reduces the transaction costs involved in
ways to accomplish large-scale mobilization for collect- the design, negotiation, and implementation of coop-
ive action, because the clients had limited, if any, exit erative agreements with other municipalities, essen-
options out of the hierarchical network (Shami 2012). tially because the number of internal veto-players with
In other words, the presence of close knit ties within diverging preferences is minimized (Tsebelis 2002).
communities precluded the appearance of social capital Agency costs increase significantly whenever officials
that can be used to span municipal boundaries required face internal pressures such as administrative resist-
to achieve intermunicipal cooperation. ance, interest group opposition, and racial diversity
The literature is unanimous in indicating that Greece, (Feiock, Steinacker, and Park 2009). In contrast, homo-
Portugal, France, Spain, Italy, and Poland comprise the geneity within municipalities lessens agency costs for
group of countries following a strong mayor tradition local officials to aggregate diverse preferences among
(Heinelt and Hlepas 2006; Magre and Bertrana 2007), residents (Kwon, Feiock, and Bae 2012).
where the mayor represents the interests of the com-
Proposition 3a: Homogeneity of preferences
munity (Heinelt and Hlepas 2006). Reduced levels of
within a community facilitates the adoption of
social capital and trust in others combined with strong
less formal regional governance mechanisms
mayoral leadership lead to the adoption of regional
(cells on the “embeddedness” column on figure
governance tools based on the formalization of agree-
1).
ments between mayors or top–down integration of
Proposition 3b: Heterogeneity of preferences
intermunicipal cooperation efforts.
within a community leads to the adoption of
In contrast, communities where business-pro-
more formal regional governance mechanisms
fessional ties are pervasive should be better able to
(cells on the “contracts” and “delegated author-
overcome ICA dilemmas through self-organizing
ity” columns on figure 1).
mechanisms, because these weak ties operate as
bridges between communities (Breiger and Pattison
cited by Granovetter 1983). Scandinavian countries Preference Homogeneity Between Communities
enjoy pre-conditions for many weak ties to bridge The ICA framework stresses that heterogeneity
across municipalities. Shared values, decentralized between neighboring municipalities associated with
political organization, consensual policy-making, and social, demographic, racial, and income inequalities
organicist state-society relations influence both large- diminishes the likelihood of successful collaboration
scale territorial reforms and interlocal cooperation (Feiock 2013). The larger these community differences
and make this context much more prone to achieve are, the more difficult it becomes to collaborate. As an
ICA than countries with other state traditions. Since example, large differences in median income erect sig-
political leadership is decentralized and tends to fol- nificant barriers to cooperation, because the benefits of
low some type of collegial mayor format (Heinelt and cooperation will appear less appealing for the wealth-
Hlepas 2006), the adoption of self-organizing mecha- ier community. The financial status of prospective part-
nisms is far less dependent of the personality of the ners has an analogous effect.
mayor in office. In contrast, homogeneity decreases the transaction
costs of intergovernmental agreements by emphasiz-
Proposition 2a: Local political institutions char- ing common interests and preferences among local
acterized by weak ties lead to the adoption of less governments. Theory predicts that cooperation will
formal mechanisms for regional governance (cells be achieved if local governments are racially and eco-
on the “embeddedness” column on figure 1). nomically homogeneous (Post 2004). The same rea-
Proposition 2b: Local political institutions char- soning applies to demographic features. Neighboring
acterized by strong ties lead to the adoption of small communities with similar urban form may find
regional governance mechanisms based on for- it in their interest to cooperate, not only because they
malization (cells on the “contracts” and “del- are more likely to share personal, professional, and
egated authority” columns on figure 1). recreational activities (Post 2004), but also because

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they will be able to take advantage of scale econo- role and possible trade-offs between centralized and
mies. Demographic homogeneity also contributes to decentralized governance alternatives.
minimize political and economic power asymmetries
between jurisdictions, thereby facilitating the distribu- Proposition 5a: The interaction between regional
tion of gains derived from cooperation (Feiock 2013). governance mechanisms generates substitution
effects in the adoption of new mechanisms.
Likewise, cultural models of interlocal relations
Proposition 5b: The interaction between regional
stress the role of similar political cultures in establishing
governance mechanisms generates multiplier
dynamic patterns of cooperation. James Visser (2002)
effects in the adoption of new mechanisms.
argues that shared cultural manifestations conveyed by
community values, leadership capabilities and styles,
the political benefits of appearing to be cooperative, Goal Congruence
and the protection of local decision-making autonomy Collaboration risk is centered on the insight that vol-
and control can influence the decision to cooperate in untary exchanges among local governments are sub-
local settings. ject to transaction uncertainties leading to problems of
Proposition 4: Homogeneity of preferences incoordination (inaction), division (division of costs),
between communities facilitates the adoption and defection (agreement violation) (Feiock 2013).
of less formal regional governance mechanisms Coordination problems arise when local governments
(cells on the embeddedness column on figure 1). fail to act together due to information asymmetries.
Proposition 4b: Heterogeneity of preferences Despite agreement over goals, lack of information is
between communities leads to the adoption of an obstacle to coordination. Central actors in regional
more formal regional governance mechanisms networks can contribute to information dissemination
(cells on the “contracts” and “delegated author- in the network to facilitate coordination in joint activi-
ity” columns on figure 1). ties and reduce information asymmetry problems.
Division problems occur when local government
officials agree on general goals, but not on the alloca-
Interaction Between Mechanisms tion of benefits and costs. For example, Hatley, Elling
Regional governance solutions to ICA dilemmas and Carr’s (2015) case analysis of an effort by five sub-
are not adopted in isolation, independent from one urban communities in the Detroit metropolitan area to
another. The scope of pre-existing integration arrange- create a single multijurisdictional fire and emergency
ments can influence the adoption and success of new medical services authority to replace their individual
arrangements. For example, multilateral contractual fire departments illustrates how individual goals of
agreements can reinforce prior informal collaboration costs savings may increase transaction costs to the
based on regular meetings to exchange ideas. This type point that the effort to share services is abandoned.
of network embeddedness breeds trust and credible City administrators expected to reap long-run sav-
commitments that reduce the transaction costs and ings from the fire authority, but most elected officials
increase the efficiency involved in the design, negotia- expected short-run cost savings. This example illus-
tion, and enforcement of a formal agreement (Kwon, trates how the problematic distribution of cost savings
Feiock, and Bae 2012; Thurner 2010). Similarly, suc- among participants can require extensive negotiations
cessful bilateral contracts for service delivery can be that complicate the process of reaching an agreement
transformed into a network of regional multilateral over the adoption of an ICA mechanism (Heckathorn
agreements for the same service. Conversely, the level and Maser 1987).
of activity of a supramunicipal level organization Defection problems derive from the expectation
influences the likelihood of collaborative exchanges that rational actors will engage in opportunistic behav-
between their members (Feiock 2013). ior. Enforcement costs increase as each party has to
Another obvious source of interaction between monitor compliance by other parties and all parties
regional governance mechanisms is derived from a involved can either fulfill or renege on the agreement
possible crowding out or substitution effect caused by (Heckathorn and Maser 1987). The conventional wis-
solutions imposed by central authorities (Brooks 2000; dom is that more formal, integrative and encompass-
Kwon et al. 2012; Lubell et al. 2002). Centralized solu- ing mechanisms are required to avoid defection. Feiock
tions may substitute self-organizing governance, par- (2013) argues that credible commitments between con-
ticularly when the constitutional-legal framework and tracting parties can still be reached in informal settings
the historic and cultural settings are adverse to vol- as highly embedded collaboration networks of reputa-
untary collaboration efforts by local authorities. This tion and reciprocity reduce collaboration risk.
argument suggests that the understanding of collective Based on these arguments, we see that the type
action dilemmas requires an integrated analysis of the of ICA dilemma is associated with varying levels of

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collaboration risks and transaction costs. When there Illustrating the ICA Framework with Regional
is a conflict of goals among participants, more com- Governance Examples from European
plex and authoritative solutions may be needed to Countries
generate successful regional governance agreements. The ICA framework is a tool to understand the nature
Collaboration risks are higher for ICA dilemmas of ICA dilemmas faced by local authorities and the
involving conflicts over goals, not only because actors transaction costs associated with the choice of the
need to agree on the division of benefits and costs but regional governance mechanisms to overcome these
also because of potential defection from the agreement. dilemmas. Now we illustrate the usefulness of this
By contrast, in ICA dilemmas that involve less conflict framework to analyze regional governance arrange-
over goals, the problem is simply one of coordination ments in European countries by identifying examples
on how to reach those goals. of different mechanisms employed in practice to miti-
Proposition 6a: Less goal conflict among par- gate ICA dilemmas. The examples demonstrate that all
ticipants is associated with less complex regional cells of the ICA framework are empirically plausible.
governance mechanisms (cells on the “embed-
dedness” columns on figure 1).
Mechanisms for Integrating ICA Problems: Network
Proposition 6b: More goal conflict among par-
Embeddedness
ticipants is associated with more formal regional
Theories of social embeddedness place intergovern-
governance mechanisms (cells on the “contracts”
mental relationships within larger social, political, and
and “delegated authority” columns on figure 1)
economic structures (Feiock 2013; Granovetter 1985).
Proposition 6c: Extremely high goal conflict
The geographical immobility and proximity between
among participants is associated with no volun-
local government units creates opportunities for the
tary solution to the ICA dilemma) (cells on the
establishment of dense tightly-clustered network rela-
“imposed authority” columns on figure 1).
tionships that promote social capital, breed trust and
The previous subsections discuss how the nature and reciprocity, and minimize opportunism (Berardo and
degree of transaction costs and collaboration risks Scholz 2010; Gulati 1995). The presence of these ele-
associated with community characteristics define the ments in regional contexts explains the development
ICA dilemma faced by local authorities and influence of successful self-organizing solutions to collective
the choice of mechanisms to mitigate the dilemma. action dilemmas. Social embeddedness helps to miti-
Participation in voluntary action takes into account gate opportunism because long-term interaction builds
the expected net benefits derived from the adoption of reputation among potential partners and prevents
an ICA mechanism discounted by the risks that partic- untrustworthy behavior.
ipants will be unable to coordinate, agree on division The difficulty in establishing ties of trust and
of costs and benefits or protect themselves from defec- cooperation among strangers that is prevalent in
tion In more detail, Feiock (2013, 408) argues that specific parts of Europe suggests different attitudes
the net benefits express the differential between the towards self-organizing solutions. In order to engage
transaction costs of adopting and continuing to par- in collective action, individuals need to share mean-
ticipate in a specific governance arrangement and the ings and a common identity. Banfield (1958) proposed
expected gains associated with the mitigation of the the term “amoral familism” to describe the difficulty of
dilemma for the participants. Costs capture the cur- southern Italians to trust and cooperate with individu-
rent value of all current and future transaction costs, als outside one’s immediate family. Putnam’s argument
and the gain represents the current value of all benefits that democratic innovations tend to occur where there
provided by membership in the governance arrange- is a strong tradition of civic participation (Putnam
ment. Collaboration risk reflects the risks of not being 1993; Ross 1997), underlines the fact that sharing
able to coordinate on a course of action (incoordina- common culture and political traits is fundamental to
tion); not being able to agree to a division of costs the accomplishment of collective action goals. Hence,
despite agreeing on the action (division); or risk that the propensity towards voluntary solutions for collect-
once action is agreed upon others may renege or free ive action varies according to the views of others in
ride (defection). neighboring communities and to how wide this gap is.
The following section employs the ICA framework to According to the propositions developed in the
analyze the choice of integration mechanisms as policy previous sections, informal cooperation mechanisms
instruments for cooperation in the context of European relying on social embeddedness are more likely in
countries. Whenever possible, we link the choice and decentralized political-administrative systems (propo-
the success or failure of these instruments with the sition 1a), communities characterized by an abun-
propositions developed in the previous sections. dance of social capital (“weak ties”) (proposition 2a),

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and ICA dilemmas demanding lower goal congruence Jyväskylä (Finland) is well-known for the collaborative
(proposition 6a). Typically, purely informal coop- relations established between municipalities as a result
eration is expressed through written protocols, joint of “the network city” discourse developed by elected
statements, and the like, to indicate the parties’ com- officials and municipal managers since the mid-1990s.
mitment to collaboration. It is no surprise that most The creation and development of this vision for the
examples that help to illustrate these tendencies are city-region produced a network of public and private
found in Scandinavian countries. Haveri et al. (2009) organizations working together, sharing principles and
report the formation of informal collaborating groups values, fully committed to growth-oriented develop-
and working groups with deliberative goals in munici- ment and the provision of welfare services (Haveri et
palities in Finland and Norway. These informal groups al. 2009).
are relatively narrow in scope and involve only a few
municipalities. Mechanisms for Integrating ICA Problems: Contracts
Lisbon’s social welfare network involves 331 part- In the European context, informal cooperation experi-
ner organizations, including the municipal govern- ences such as those described in the previous subsec-
ment, subcity governments (parishes), other public tion are less relevant and most cooperation is organized
sector organizations, nonprofit organizations, nongov- through explicit rules defined in formal agreements.
ernmental organizations (NGOs), private foundations, Formalization does not imply lower autonomy lev-
among many others (http://www.redesocial-lisboa. els, because rules can specify exit conditions (Bel and
pt/). Participation in these networks is voluntary and Warner 2015), but it does entail a different empha-
they can be seen as self-organizing systems or working sis in the choice of governance mechanisms. Social
groups. Social embeddedness seems to be the norm as embeddedness is still crucial in formal institutions and
participants do not back out of the network in spite of successful cooperation to overcome collective action
the absence of formal or hierarchical controls. Norms dilemmas, but purely informal collaboration based on
of reciprocity, trust, and reputation are the glue that trust and reciprocity as we described above are rare
binds participants to the network as most organiza- events.
tions are interconnected through collaboration proto- Contracts link local government units through for-
cols rather than legal contracts. The number of tasks mal voluntary agreements for solving collective action
is larger than those identified by Haveri et al. (2009) dilemmas. Contracts can be bilateral, multilateral or
for informal groups, but still confined to social wel- defined by statute. One of the major distinctive fea-
fare policies, providing the necessary goal congruence tures of contracts is that they contemplate exit provi-
suggested in proposition 6a. However, the number of sions that are usually less demanding than more formal
partners is large, turning this into an intermediate coop- mechanisms for solving ICA dilemmas, such as those
erative arrangement based on social embeddedness. involving delegated or imposed authority. However,
City-regions in The Netherlands are examples of unlike credible commitments relying exclusively on
encompassing cooperative arrangements involving social embeddedness, contracts stipulate legal obliga-
multiple local governments for the purpose of regional tions for the signing parties.
governance in a wide range of policy domains, includ- Contracts are established between two or more
ing urban planning, transportation, economic devel- municipalities and formalized by either interlocal
opment, and social and cultural policies. Initially, this agreements or intermunicipal associations that com-
type of collaboration took advantage of a favorable ply with the legislative framework set up by federal,
legal framework defined by the national government national, and/or regional governments. Interlocal
formally assigning task responsibilities and financial contracts tend to be characterized as a market-
incentives to regional governance initiatives. Even based approach by New Public Management type
though this legal framework is no longer in place and of reforms, as evidence by the preference for this
the Dutch national government now sees regional col- instrument of cooperation by the conservative/lib-
laboration as a needless governmental layer, munici- eral party in Norway (Gjertsen 2014). Both interlo-
palities maintain collaboration agreements in these less cal contracts and associations of municipalities have
institutionalized, more informal, governance structures. been linked to contexts where social capital is more
This development fits with proposition 5a, suggesting abundant and intermunicipal cooperation more insti-
the replacement of formal cooperation structures by tutionalized and persistent, including The Netherlands
informal ones based on successful past experiences. (Hulst and Van Monfort 2007b), France (Hertzog
ICA dilemmas in the Dutch context motivate munici- 2010; Hulst and Van Monfort 2007b), Norway
palities to accept their interdependence and to foster (Jacobsen 2015), and Italy (Percoco 2016).
negotiation and trust as key drivers of their joint efforts Associations of municipalities are fairly common
(Metze and Levelt 2012). Similarly, the city-region of across several European countries and usually based

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on prior ties and contiguity. The agreements also set key role in the establishment of intermunicipal coop-
up entry and exit requirements. These associations are eration and voluntary municipal mergers. As suggested
narrow in scope, providing services within a single by proposition 5b, social interaction breeds norms of
policy area, including water supply, solid waste sys- trust and reciprocity among individuals from different
tems, and economic development, among many oth- communities that is later used as the glue that helps
ers. The number of partners tends to be larger than reinforce and solidify formal arrangements between
typical interlocal contracts, making this an interme- communities.
diate integration mechanism based on contractual In line with proposition 4a, the heterogeneity of pref-
agreements. erences and the power asymmetries between munici-
The communautés in France are single-purpose organ- palities in a region have also been linked to increased
izations run by representatives of the local executives and difficulties in accomplishing intermunicipal coopera-
have the power to tax (West 2007). French municipalities tion through less formal instruments, such as contracts
remain functionally weak and small, so inter-local con- and associations. Recent work conducted in Porto
tracts are crucial for the delivery of public services and to (Portugal), Antwerp (Belgium), and Bristol (the United
cope with operational and policy co-ordination problems Kingdom) shows that the perceptions of power asym-
(Wollmann 2004b). The French example highlights how metries between municipalities in these urban regions
informal norms of cooperation have become imprinted without a dominant core city affect their willingness
in France’s local government DNA and eventually sup- to cooperate, even more so than political differences
port other, more formal mechanisms of cooperation. This (Cardoso 2016). The deleterious effect of power asym-
provides some evidence in support of proposition 5b that metries on this type of cooperative efforts has also been
the interaction between regional governance instruments reported for metropolitan areas in Poland (Krukowska
generates multiplier effects. and Lackwoska 2017) and joint-ventures in Norway
Municipal unions in Italy are temporary partner- (Holum 2016).
ships for joint delivery of front- and back-office ser- In sum, contractual arrangements for cooperation
vices (Fedele and Moini 2007) as well as other basic in several European countries take the form of interlo-
services (social services, kindergartens, schools, trans- cal agreements or municipal associations with diverse
port, water supply, waste water management, tour- institutional scopes. These voluntary associations are
ism and promotion of the territory) (Baldini et al. primarily created for service delivery purposes and
2009). These formal partnership agreements require local signatories are bounded by the joint agreement
less political commitment than other alternative as well as the legal framework established by upper
forms (e.g., mergers). The municipal unions were level governments. Given these characteristics, associa-
partially responsible for the reduction in number of tions of municipalities result from an intentional com-
other inter-municipal entities of second level cover- bination of formal contract provisions and relational
ing smaller municipalities (consortia, associations features.
and districts). However, both the consortia and the
conventions are still quite numerous; they are more Mechanisms for Integrating ICA Problems: Delegated
flexible, require minimal political commitment, and Authority
are characterized by reduced institutional scope The instruments for cooperation based on delegated
(Baldini et al. 2009; Bolgherini 2011). Other forms of authority tend to be more encompassing than con-
intermunicipal cooperation include municipal social tractual arrangements in order to respond to the
and subsidized housing institutions, municipal nurs- increased complexity of ICA dilemmas. Delegated
ing homes, and municipal companies for tourism authority mechanisms are also formal in nature and
development (Citroni et al. 2013, 216). In line with emerge as solutions from local actors’ willingness to
propositions 3b and 4b, the Italian and Spanish cases transfer power to an authority or district that acts
illustrate that as the heterogeneity of preferences independently (Feiock 2013). Municipal and inter-
increases, both within and between communities, municipal corporations and regional governments
some formalization of cooperation may be required are examples of these integration mechanisms.
in order to secure goal congruence between partners Municipal corporations adopted in several
and protect them from increased collaboration risks European countries resemble American public authori-
(Bolgherini 2014, 2016). ties, a particular form of special district that has inde-
In Switzerland, intermunicipal cooperation is com- pendent corporate status and derives revenues from
mon among all types of municipalities, but more fre- fees, charges, and borrowing (Gulick 1947; Frant
quent in small, weakly performing municipalities 1997; Horn 1995). Municipal corporations are run by
(Steiner 2003). More interesting, the author reports an executive board appointed by their parent govern-
that joint activity in volunteer associations plays a ment, because the local authority is the majoritarian,

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sometimes even the only, shareholder.4 The typical 2011), the Metropolitan Joint Committee of Upper
municipal corporation provides services in a single Silesia in Poland (Krukowska and Lackowska 2017),
policy area, giving these mechanisms a predominantly and, to a certain extent, the Amsterdam Metropolitan
narrow scope.5 This is the case of municipal corpora- Area (Schipper and Gerrits 2014).
tions in Italy (Cambini et al. 2011; Grossi and Reichard
2008), Sweden (Monti and Amna 2000), Germany Mechanisms for Integrating ICA Problems: Imposed
(Grossi and Reichard 2008), and Portugal (da Cruz Authority
and Marques 2011; Tavares and Camões 2010; For ICA dilemmas entailing extremely high transaction
Tavares 2017). Intermunicipal corporations are used costs and collaboration risks, voluntary mechanisms
when several local governments delegate service deliv- such as the types discussed in the previous sections are
ery responsibilities to a jointly owned firm. There are manifestly inefficient. At the highest level of collabora-
also several European countries adopting these types tion risk, no self-organizing voluntary solution is likely
of arrangements, including Norway (Sørensen 2008), to emerge and the collective action problem will likely
Italy (Citroni et al. 2013), and Portugal (Tavares and be addressed through a hierarchically-imposed mech-
Camões 2007; Rodrigues et al. 2012).6 anism. One of such situations occurred during the
Regional authorities are the most complex form of post-war years. Functional responsibilities assumed by
governance mechanism involving delegated authority. many European national governments increased sub-
They are broad in both functional and geographic scope stantially, largely motivated by a faith in the miracles
and entail a significant loss of authority by the govern- of professional planning, effective co-ordination, and
ment units that propose their creation. Independent large bureaucracies. Given this work overload, many
Regional Waterboards in The Netherlands date back to national governments in Northern and Western Europe
the 13th century and were set up to manage the water faced a structural obstacle in transferring service provi-
that was being retained to prevent flooding and serve sion responsibilities to local authorities. Municipalities
for agricultural purposes. Local bodies were initially and communes had been involved in a minimal num-
created to accomplish these goals, but later delegated ber service functions, covered small geographical areas,
their authority to these regional governments (De and were characterized by part-time local officials and
Boer and Bressers 2011). The Waterboards are “demo- staff. The increase in the number of local government
cratic institutions governed according to the interest- functions due to both the Welfare State growth and ris-
taxation representation principle in which groups ing urbanization pressures became the trigger for a set
paying for their ‘services’ are represented and have to of territorial reforms by rational planning and design
work together in the board. (…) In 1955 there were (Wollmann 2004a). Faced with excessive fragmenta-
2480 Waterboards spread across the country, though tion, some Western European national governments
through amalgamation actions they have been reduced forced municipal mergers as a solution (see Table in
to a total of 25.” (De Boer and Bressers 2011, 16). the Supplementary Appendix for a summary).
Finally, regional governments are, perhaps, the Some countries reduced the number of munici-
most extreme form of cooperation involving extensive palities by about two thousand or more in this time
voluntary transfer of authority (or loss of municipal span (Belgium, France, Germany, and Sweden). Other
autonomy). Examples of multipurpose metropolitan countries reduced the number of local governments
governments in European countries include the Greater by more than 60% (Belgium, Denmark, Germany,
Hanover Association (Heinelt and Zimmermann Sweden, and United Kingdom). In other cases, the num-
ber of local governments remained largely unchanged
4 Municipal corporations may change property status and become (France, Portugal) with the countertrend case of Italy
public-private (mixed) firms (Bel and Fageda 2010; da Cruz and
that increased slightly. These territorial reforms are an
Marques 2012) or completely private. For example, although municipal
corporations still provide public utilities services in many municipalities example of imposed centralized authority to solve hori-
in Portugal, this is no longer the case in Germany, where they became zontal collective action dilemmas. Coerced mergers are
private firms subjected to market competition (Wollmann 2004b). the most extreme form of imposed authority and their
5 Typically each corporation is oriented towards a single policy area, links to the propositions suggested in this work are
including water supply, wastewater management, transportation,
unclear. They seem to have been prevalent in countries
environmental services, cultural and sports activities, among many
others (Tavares and Camões 2007, 2010). with more fragmented local government systems facing
6 The territory of Continental Portugal is covered by two types of solid fast pace urbanization and the expansion of the Welfare
waste/recycling management systems: 11 intermunicipal systems and State (Askim et al. 2017; Baldersheim and Rose 2010).
12 multimunicipal systems. Multimunicipal systems are not voluntary in The absence of massive territorial reforms in
nature. They also involve more than one municipality, but the delegation
France, Switzerland, Italy, Portugal, and, to a certain
of authority is made directly by the national government to a private
company. https://www.apambiente.pt/index.php?ref=16&subref=84&s extent, Spain suggests that other alternative mecha-
ub2ref=933&sub3ref=934 (accessed August 14, 2017). nisms to address horizontal collective action dilemmas

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have been in use over the past few decades. The cases An ICA Research Agenda for Europe
of imposed authority described in this section are The ICA framework provides an approach to under-
primarily consistent with proposition 1b, suggest- stand the variable geometry of intermunicipal coopera-
ing that the Southern European cluster of countries tion and regional governance in Europe. The preference
where centralization and administrative law have for formal and hierarchical solutions is certainly clearer
been dominant traits during the second half of the in the European setting than in the US context. In this
20th century have systematically resorted to alterna- article we suggest that the variation in the constitu-
tive mechanisms to solve horizontal collective action tional-legal framework, local institutions and prefer-
dilemmas. Faced with significant opposition to merg- ences, homophily within and between communities,
ers due to a tradition of identity politics characterized goal congruence between the generic instrument and
by clientelistic local politics, parochial culture, weak the ICA dilemma to be solved, and the interaction
autonomy and underdeveloped management (Stoker between mechanisms affects the transaction costs faced
2011), these countries initially adopted top–down by local authorities attempting to address ICA dilem-
mechanisms to force municipal cooperation (Oliveira mas through collaborative agreements. Although some
and Breda-Vázquez 2016) and more recently stimu- of these factors are common to the US and European
lated broad-based instruments for voluntary coopera- settings, institutional diversity resulting from historical,
tion (Silva et al. 2016). cultural, and constitutional-legal factors explains most
Intermunicipal cooperation and privatization of of the variation across countries in Europe.
local services are frequently mentioned as alterna- The propositions developed in this article and synthe-
tive responses to territorial amalgamations in France sized in table 1 link the conditions characterizing regional
(Hertzog 2010) and Spain (Bel, Fageda, and Mur and local government systems and the nature of the ICA
2013), but for a long period after World War II, the dilemmas to the adoption of specific integration mecha-
existence of centralized authority and the prevalence nisms to promote cooperation among local governments
of local autonomy crowded out voluntary self-organ- in regional and metropolitan areas. The nature and
izing mechanisms (the substitution effect suggested diversity of the instruments to promote cooperation was
by proposition 5a). There are recent examples of emphasized in the last section of the article and synthesized
mechanisms entailing imposed authority for integrat- in figure 2. This figure includes examples drawn from the
ing ICA dilemmas that avoid full-fledged mergers, but empirical literature on intermunicipal cooperation and col-
involve hierarchically based solutions. In Spain and laborative regional governance in European countries that
France, upper levels of government provide financial illustrate the 12 cells defined by the two classification crite-
and technical support for services involving shared ria employed in the ICA framework: the type of integration
competencies by all levels of governments. The con- mechanism (horizontal axis) and the degree of complexity
sorcios (Spain) and the syndicats mixtes (France) are (vertical axis). These policy instruments are employed in
vertical cooperation arrangements set up to address different countries across Europe to improve coordination
the provision of services in a single policy area (water between local authorities seeking to accomplish common
management or public transportation, for example) (supra-municipal) goals and provide solutions to conflicts
(Bel and Warner 2015; Hulst et al. 2009). In Portugal, between jurisdictions over negative externalities.
Metropolitan Transportation Authorities (MTAs) are Figure 2 shows that it is both theoretically and
regional bodies responsible for the coordination of empirically possible to find policy instruments across
planning, transportation, and mass transit decisions the spectrum of combinations of integration mecha-
across multiple local governments. MTAs are not vol- nisms and degrees of complexity. The determinants of
untary in nature and their creation by the national adoption of the policy instruments included in the cells
parliament resulted in an effective loss of authority of figure 2 can be investigated by converting the propo-
by the municipalities that comprise the metropolitan sitions in table 1 into testable hypotheses tailored for
areas of Lisbon and Porto. The majority of mem- each research setting. However, it is important to notice
bers in the general council and executive board are that our goal was not to be exhaustive in describ-
appointed by the national government, whereas a ing all possible integration mechanisms adopted by
minority is appointed by the executive board (Junta) every single country in the European continent. Other
of the Metropolitan Area Government. The absence instruments may be available and used which were not
of significant decentralization movements in these included in our analysis.
countries also explains the lack of consideration given Some limitations should be acknowledged in our goal
to municipal mergers as a solution to ICA dilemmas. of applying the ICA framework to investigate intermu-
Since the nature of the ICA problems was much less nicipal cooperation in European countries. First, our
complex, most dilemmas were addressed using less analysis fails to address which policy instruments are
cumbersome mechanisms. predominant in specific countries; this was not our goal

on 08 March 2018
here, but it can certainly be pursued as an avenue of these propositions into testable hypotheses in order to
future research for scholars interested in assessing the develop empirical work concerning the causes of adop-
diversity in the use of policy instruments for intermunici- tion. Finally, we have not explicitly included an evolu-
pal cooperation in a comparative perspective. Second, tionary perspective in the ICA framework presented
the propositions were illustrated using selected examples here, but future work should engage in expanding it to
from the European setting, but our goal was not to be this type of longitudinal analysis (Schipper and Gerrits
comprehensive. Future research should operationalize 2014).
Table 1. Factors Influencing the Adoption of Policy Instruments for Regional Governance
Proposition 1a: Countries with a longer tradition of a constitutional-legal framework favouring decentralization and
self-government facilitate the adoption of less formal mechanisms for regional governance (cells on the
“embeddedness” column on Figure 1).
Proposition 1b: Countries with a longer tradition of a constitutional-legal framework favouring centralization and
administrative law prefer the adoption of regional governance mechanisms based on formalization (cells on
the “contracts” and “delegated authority” columns on Figure 1).
Proposition 2a: Local political institutions characterized by weak ties lead to the adoption of less formal mechanisms for
regional governance (cells on the “embeddedness” column on Figure 1).
Proposition 2b: Local political institutions characterized by strong ties lead to the adoption of regional governance
mechanisms based on formalization (cells on the “contracts” and “delegated authority” columns on Figure 1).
Proposition 3a: Homogeneity of preferences within a community facilitates the adoption of less formal regional governance
mechanisms (cells on the “embeddedness” column on Figure 1).
Proposition 3b: Heterogeneity of preferences within a community leads to the adoption of more formal regional governance
mechanisms (cells on the “contracts” and “delegated authority” columns on Figure 1)
Proposition 4: Homogeneity of preferences between communities facilitates the adoption of less formal regional
governance mechanisms (cells on the embeddedness column on Figure 1).
Proposition 4b: Heterogeneity of preferences between communities leads to the adoption of more formal regional governance
mechanisms (cells on the “contracts” and “delegated authority” columns on Figure 1).
Proposition 5a: The interaction between regional governance mechanisms generates substitution effects in the adoption of
new mechanisms.
Proposition 5b: The interaction between regional governance mechanisms generates multiplier effects in the adoption of
new mechanisms.
Proposition 6a: Less goal conflict among participants is associated with less complex regional governance mechanisms (cells
on the “embeddedness” columns on Figure 1).
Proposition 6b: More goal conflict among participants is associated with more formal regional governance mechanisms
(cells on the “contracts” and “delegated authority” columns on Figure 1)
Proposition 6c: Extremely high goal conflict among participants is associated with no voluntary solution to the ICA
dilemma) (cells on the “imposed authority” columns on Figure 1).
Encompassing Multi-Purpose Regional / Forced

City-regions/
Complex Municipal Metropolitan Municipal
Network cities
Collective Associations Governments Mergers
Single-Purpose Metropolitan
Intermediate Social Welfare Intermunicipal
Municipal Transportation
Multilateral Networks Corporations
Associations Authorities
Narrow
Informal Interlocal Municipal Consorcios and
Single Issue
Working Groups Agreements Corporations Syndicats Mixtes
Bilateral
Delegated Imposed
Embeddedness Contracts
Authority Authority
Figure 2. Policy Instruments for Integrating ICA dilemmas in Europe Countries.

on 08 March 2018
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Perspectives on Public Management and Governance, 2017, 1–18

Applying an Institutional Collective Action

Address correspondence to the author at atavares@eeg.uminho.pt.

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Figure 1. Integration Mechanisms and Transaction Costs.

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Constitutional-Legal Framework The degree of functional and territorial decentrali-

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The internal organization of communities in Southern Community Homogeneity

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Encompassing Multi-Purpose Regional / Forced

Figure 2. Policy Instruments for Integrating ICA dilemmas in Europe Countries.

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