Applying the Institutional Collective Action Framework to

Metropolitan Governance in Latin America and the Caribbean

Richard C. Feiock & Edgar E. Ramírez de la Cruz

Introduction
Fragmentation of governmental authority is ubiquitous in Latin American metropolitan regions.

The 64 metropolitan regions of Latin America and the Caribbean (LAC), with over one million

residents, include more than a thousand municipal governments. Urbanization and

metropolitan growth have multiplied local service demands, straining public management

capacities.

Local governance arrangements of metropolitan regions in LAC countries often lack the

strategic coordination required to achieve the collective interests of their local governments

and their citizens. Lack of coordination or cooperation across jurisdictions produces spillovers

and inefficiency in land use, infrastructure, and the provision of urban services. These problems

can be framed as an institutional collective action (ICA) dilemma.

ICA dilemmas are political, as well as administrative, since they result from the

fragmentation of political authority in metropolitan areas (Feiock 2013; Ramírez de la Cruz

2012). Horizontal ICA dilemmas among independent governments at the same level, as the

consequences of one unit’s actions, spill over into neighboring jurisdictions — as when one city

in a metro area makes a land use or transportation decision that affects neighboring

municipalities. Metropolitan governance is further complicated by vertical ICA dilemmas

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arising when government action at one level overlaps the functions or territory of actions

pursued by governmental authorities at a higher or lower level of government (Feiock 2013).

In this context, integrated solutions to complex problems are difficult, since individual

governments’ pursuit of their goals and interests results in collectively inefficient outcomes for

the metropolitan region. Feiock’s (2013) ICA framework defines and systematically compares

alternative mechanisms for mitigating these problems. Although the public administration

literature emphasizes centralized reforms such as the consolidation of governments or strong

regional authorities as a solution to the problems of collective action in metropolitan areas, a

number of alternative governance mechanisms may also be available, including voluntary

collaborative arrangements (Ramírez de la Cruz 2012) and Feiock’s taxonomy of mechanisms

for mitigating collective dilemmas (Feiock and Scholz 2010; Feiock 2013). Integration

mechanisms vary along two dimensions: 1) scope - from bilateral relationships between two

units to multilateral or multifunctional processes including all relevant actors and functions;

and 2) authoritativeness - the extent to which they rely on informal commitments versus formal

mandates imposed by higher-level political authorities (Feiock 2009). The costs of collaboration

to individual governments increase with collaborative arrangements that are broader in scope

and/or more authoritative and binding for local governments. Accordingly, city governments

are presumed to voluntarily commit to collaborative solutions when the net utility of doing so

outweighs that of inaction or going it alone (Feiock and Scholz 2010).

Fragmented Authority and Governance of Metropolitan Areas

The worldwide movement of decentralization and devolution of processes from central to local

governments encouraged by international organizations such as the World Bank and the United

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Nations has been thought to strengthen democracy and facilitate context-specific delivery of

public services, but decentralizing authority to the local level in urban areas produces spillovers

and creates challenges for achieving economies of scale. Responses to these types of

institutional collective action dilemmas have been remarkably different across the globe

(Tavares and Feiock 2018).

These trends toward decentralization and devolution to sub-national governments are

reflected across Latin America. Many of Latin America’s largest metropolises face significant

governance challenges due to excessive fragmentation (such as Mexico City, São Paulo, Buenos

Aires and Santiago), with monocentric metropolitan regions constituting the exception, either

by intentional design (Lima) or as a result of the historical dominance of the central city

(Bogotá) (Nickson, 2011; Frey, 2014). Although certain aspects of metropolitan governance

problems faced in Latin America are similar to those encountered in the US, Canada, and

Europe, some are quite unique. For example, the case analysis in this report suggests that

contextual factors such as limited professionalization, particularly in less developed cities, spoils

systems, corruption, limited financial resources, involvement of national governments as well

as political risk aversion by local officials are often more salient in urban regions of Latin

America.

One focus of the ICA approach is to identify factors that influence the choice of

mechanisms for collaboration among municipalities. Efforts to increase local capacity, leverage

economies of scale, and improve local service delivery have spawned a variety of different

arrangements for the organization and governance of metropolitan areas ranging from highly

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decentralized to consolidated systems such as Lima’s metropolitan government. Inter-

municipal cooperation has only recently received the attention it deserves.

This report offers an extension of the ICA framework, modifying its concepts and

assumptions to fit the Latin American context. It seeks to enhance our understanding of

metropolitan governance in the region and offer assessment criteria and alternatives for

political and administrative leaders to consider in managing urban services in metropolitan

areas. An overall theory or approach to metropolitan governance in Latin America has been

lacking due to the absence of a framework to encompass and integrate the variety of

arrangements and approaches to governance. The Institutional Collective Action framework

has the potential to provide precisely this type of integrative approach to understand the

various forms of integration and cooperation within metropolitan areas of Latin America. ICA

provides a generalizable governance perspective by identifying potential alternatives to address

regional issues and the barriers to intermunicipal collaboration. This integrated approach

allows us to explain and predict the governance dynamics and arrangements that could

emerge. ICA can also offer a guide to mechanisms and suggest minimum configurations to

feasibly foster inter-municipal cooperation in a given setting.

After the introduction, the following sections elaborate on the ICA framework in order

to apply it to metropolitan governance in the LAC. The second section summarizes the ICA

approach and defines the institutions and mechanisms for local collaboration in terms of the

authoritativeness of the integration mechanism and the scope of action of the actors involved.

We introduce the concept of collaboration risk to explain how the nature of the problem, the

actors involved, and existing institutions shape collaboration decisions. Section Three extends

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and modifies this approach by outlining an ICA framework for metropolitan governance in LAC,

identifying differences in the types of collaboration mechanisms used, and specific types of

collaboration risks present in large urban areas of Latin America. This section details collaboration

mechanisms in four major metropolitan areas - Bogotá, Buenos Aires, Monterrey and Santiago - to

identify how transaction costs and the nature and degree of collaboration risks influence the ICA

mechanisms in place in each area. This allows us to gauge the main collaboration risks in Latin America

and apply them to our framework.

We conclude by summarizing the cases in light of the LAC-ICA framework, discussing the

implication of these analyses of metropolitan governance in Latin America more generally and

advancing an agenda for the future study of intermunicipal cooperation in LAC. This report

thereby begins to fill in the gaps in our understanding of metropolitan governance and inter-

city collaboration in Latin America and the Caribbean. We draw new insights for metropolitan

governance from applying ICA to Latin America, and discuss the implications of the modifications made

to ICA to better fit the types of ICA dilemmas found, and the specific types of collaboration risks present

in large urban areas of LAC. This report thereby contributes to our understanding of

metropolitan governance and intercity collaboration.

The Institutional Collective Action Framework

Institutional Collective Action (ICA) dilemmas arise when fragmentation of political authority

leads two or more local governments in a region or metropolitan area to make individual

decisions that yield poorer collective outcomes than those that would be obtained if they acted

together (Feiock, 2013). As in many parts of the world, these dilemmas are common in

metropolitan areas of LAC. Questions of authority and scope are key to understanding and

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designing effective regional collaboration mechanisms. In selecting mechanisms for

collaborative regional governance, we need to understand when more authoritative

arrangements are required and the legal and political feasibility of transferring authority from

local government to another authority. We also need to understand the scope of governments

and services that must be included to effectively address problems, and the implications of

expanded scope for decision-making costs. We introduce the concept of collaboration risk and

apply it to our cases to assess how the national and local context, the actors involved, the

nature of the service problem, and existing institutions shape choices regarding the authority

and scope of collaboration arrangements.

Foundations of the ICA framework

The ICA framework has been shaped by theory developed across multiple professional fields

and social science disciplines and the study of collective action, local public economics,

transaction costs, social embeddedness, and policy instruments form the building blocks of the

ICA approach. We review this literature to create a basis on which a theory of ICA in Latin

America can be built.

Common interests and goals are often insufficient to achieve successful collective action

(Olson, 1965). This individualistic logic can be expanded to organizational actors defined by

position, authority, and aggregation rules for collective decision making (Ostrom, 1990; 2005).

Since metropolitan economies tend to be fragmented and polycentric, some level of

governance institutions is required (Oakerson, 2004; Oakerson and Parks, 2011; Ostrom,

Tiebout, and Warren, 1961, Ostrom, 1989). The local public goods theory’s focus on

polycentrism as a process of decision making, whereby multiple independent actors interact to

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produce an outcome that is commonly valued, and the resulting pattern of governance involves

the interaction of multiple independent actors in a regional or metropolitan setting, where no

central authority takes precedence over others (Oakerson, 2004; Ostrom, Tiebout and Warren,

1961). To the extent that competition and cooperation efforts develop between the various

jurisdictions in the metropolitan area, these units are able to offer a wider range of goods,

services, prices, and alternatives from which citizens can choose (Ostrom et al., 1961).

Choices among alternative service delivery mechanisms are influenced by the

uncertainties or “transaction costs” associated with exchange (Brown and Potoski 2003).

Transaction costs economics identifies the costs in the exchange of goods or services between a

provider and a user. Transaction costs analysis assumes boundedly-rational actors and

opportunism are present in contractual agreements. Accordingly, contracts involve both ex-

ante costs associated with information and search costs, bargaining and negotiation costs, and

ex-post costs linked to agency costs and enforcement costs. The ICA framework argues that the

choice of mechanisms to overcome collective action dilemmas faces transaction costs that limit

self-organizing efforts (Feiock, 2013). Theories of social networks suggest that

intergovernmental relationships are embedded in larger social, political, and economic

relationships and structures (Granovetter, 1985; Feiock, 2013). The geographical immobility and

proximity between local government units creates opportunities for the establishment of

dense, tightly-clustered network relationships that promote social capital, breed trust and

reciprocity, and minimize opportunism (Gulati, 1995; Berardo and Scholz, 2010). The presence

of these elements in regional contexts explains the development of successful self-organizing

solutions to collective action dilemmas that are not captured through transaction cost

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economics. Social embeddedness helps mitigate opportunism because long-term interaction

builds reputation among potential partners and prevents untrustworthy behavior.

The policy analysis literature directs our attention to choices between the generic policy

instruments and specific mechanisms governments use to pursue their policy goals (Salamon

and Lund 1989; Linder and Peters 1989; Salamon and Elliott, 2002; Peters 2018). There is an

array of policy tools to integrate collective action dilemmas, and the choice can be cast as a

dynamic, political contracting process among officials representing each local government unit

(Lubell et al., 2005, 2009; Feiock et al., 2008).

Fragmentation of governmental authority in urban areas makes management of

common-pool resources complicated, producing positive and negative externalities and aloss of

economies of scale, and may lead to free-riding in service delivery for public goods. Although

ceding power to a regional authority offers a solution, consolidation of governments also

entails inefficiencies and it is often not politically feasible for local governments to surrender

their power and give up their control over policy within their jurisdictions. This trade-off

between local governments ceding power to a regional authority to achieve benefits for the

community and foregoing these benefits to retain local control over policy defines the choices

local governments make. In order to go beyond this trade-off, local government officials must

“consider the expected regional benefits and costs of the policy, the expected local benefits and

costs, and how those compare to the likely political costs associated with delegating power to

the region”. (Gerber and Gibson, 2009). For example, the transfer of powers and

responsibilities for service provision to a metropolitan government, an association of

municipalities or an intermunicipal authority may produce economies of scale and improve

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technical efficiency, but also entails an upward transfer of powers and loss of local autonomy

by the municipalities that participate.

The attractiveness of voluntary local agreements to local leader is likely to vary

depending on the nature of the problems to be handled, the geographic configuration of local

governments, the size of the group involved in the solution, the availability of public

entrepreneurs to promote the solution, and the statutory framework for local government

cooperation (Feiock and Carr, 2001; Post, 2004; Feiock, 2009, 2013). In extending the ICA

framework to Latin America, it is critical to account for the way different institutions and

national contexts shape the preferences of the actors involved, the selection of tasks for

collective action, and the range of possible mechanisms that are legitimate, feasible and

available to solve collective action dilemmas (Feiock, 2009; 2013; Feiock and Shrestha 2017).

Authority and Scope of Integration Mechanisms

Intermunicipal arrangements are defined by: 1) the authoritativeness of the integration

mechanism; and 2) the scope of the arrangement. This section elaborates on these dimensions

and defines the entire range of mechanisms that are theoretically possible as combinations of

the two. The set of actual arrangements that are possible will vary across governments and

cultures. Although examples of all the possible combinations can be found in the US (Feiock

and Scholz 2010), the range of alternatives was found to be significantly more limited in many

European (Tavares and Feiock 2018) and Asian (Yi et al. 2018) countries. Figure 1 below defines

the types of potential arrangements, using examples drawn from the US and then discusses

potential alternatives in Latin American countries.

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 Figure 1:
Mechanisms for the Integration of ICA Dilemmas and Transaction Costs

High Transaction Costs

- - - Decision Costs + + +

Multilateral

Bilateral
Low Transaction Costs

Voluntary Coercive

--- Autonomy Costs +++

Public administration studies on collaboration emphasize transaction costs. We focus

on “mechanism transaction costs” based on differences in autonomy loss and decision costs of

alternative arrangements (Feiock and Scholz 2010; Feiock 2007; 2013). Thus, the cost

dimensions of these two mechanisms are represented as the axis of Figure 1. The choices of

governance mechanisms to overcome ICA dilemmas depend on the transaction costs for local

authorities pursuing joint or collective outcomes.

The vertical axis in Figure 1 defines the scope and complexity of solutions to ICA

dilemmas. We assess this dimension in terms of decision-making costs that include the costs

involved in the design and negotiation of a collaborative agreement capable of overcoming

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collective action problems associated with the number of actors (Olson, 1965) as well as the

costs involved in managing task diversity and complexity (Homström and Milgrom, 1991). As

the number of local governments affected and the number of tasks involved increases, greater

scope is needed to effectively address an ICA dilemma (Feiock, 2013; Shrestha and Feiock 2017;

Deslatte et al 2017).

The cells in the bottom row include solutions involving only a few local authorities and a

narrow policy focus. Governance arrangements with a broader scope involve a larger number

of governments and encompass multiple policy functions. When the intermunicipal cooperation

mechanism adopted has a narrower scope, decision making costs tend to be lower, with costs

increasing as the number of players and number of tasks involved increase.

The horizontal axis in Figure 1 depicts a continuum of authoritativeness for collaboration

mechanisms ranging from networks of voluntary agreements to imposed authority, with

arrangements based on contractual agreements and delegated authority between these

extremes (Feiock, 2013). Intermunicipal arrangements can be assessed on this dimension in

terms of autonomy costs – i.e. how much local autonomy must be sacrificed. Any kind of

cooperative arrangement entails giving up a certain degree of autonomy because each

municipality is effectively conceding a portion of its authority and control. Highly formalized

policy mechanisms involve more significant transfers of powers from a municipality to another

entity or organization. The extreme case is the municipal merger or amalgamation, where

municipalities cease to exist as autonomous entities and are replaced by a higher-level

authority.

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 Network embeddedness mechanisms rely on norms of trust, reciprocity, and reputation

resulting from long-term interaction between local actors to elicit credible commitments from

the institutional actors involved in the exchange. The autonomy of each local government unit

is not jeopardized, since these solutions are informal and have little impact on the structure of

local units. Contractual agreements lock participants into a legally binding collaborative

agreement, but they are voluntary, and their provisions can be modified or adopted if the costs

of designing, negotiating, and enforcing the agreement are kept low (Coase, 1960). Contracts

can include exit provisions to avoid the perception of loss of autonomy by the parties that could

prevent an agreement from being reached, although exit provisions may need to be high to

discourage defection. Local governments may also voluntarily delegate some authority to a

metropolitan-level authority. The loss of autonomy involved in the delegation of authority

depends on the governance structure adopted by the newly-created organization.

Imposed authority is a centralized solution designed by a higher-level authority to direct

the actions of local units and internalize ICA dilemmas (Feiock, 2013). Municipal mergers and

the consolidation of several general-purpose local governments into a single metropolitan area

government are examples of centralized mechanisms employed to forcefully solve collective

action dilemmas. Figure 2 presents the classification of regional integration mechanisms in the

US context. While some of the mechanism are similar to those found in LAC, others are specific

to the US context because of the types of collaboration risks found there.

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 Figure 2
ICA Mitigation Mechanisms in US Metropolitan Areas

Encompassing Multiplex Councils of Regional Externally

Complex/ Self-organizing Governments Authorities Imposed
Collective Systems Annexation
Working Partnerships/ Multi-Purpose Managed
Intermediate Groups Multilateral ILAs Districts Network

Narrow Informal Service Single Purpose Imposed District /

single issue/ Networks Contracts Special Districts Mandated
bilateral Agreements
Embeddedness Contracts Delegated Imposed
Authority Authority

Collaboration Risk

Transaction cost framing is supplemented by the concept of “collaboration risk”. Collaboration

is risky because even an arrangement that promises to benefit all participants, may fail if it is

difficult to set up, it proves difficult to agree on a fair distribution of costs and benefits, or it is

in the interest of one or more participants to exit or free-ride. The literature defines these

barriers to collaboration as coordination, division, and defection problems (Maser 1994; Feiock,

2004, 2013; Carr and Hawkins, 2013; Terman et al. 2017).

Relational uncertainties regarding the intentions and commitment of other actors

underlie collaboration risks. Voluntary exchanges among governments are subject to

uncertainties leading to problems of inaction (incoordination), cost division issues, or defection

by one or more parties from an agreement. Coordination risks arise when local governments

face common problems that can be most effectively addressed collectively, yet fail to act

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together because they lack the information required to coordinate their actions. Division risks

occur when local government officials agree on general goals for collaboration, but are unable

to agree on who is to bear what share of the costs (Heckathorn and Maser, 1987). Defection

risks derive from the potential for opportunistic behavior when participants free-ride or fail to

honor their obligations. Uncertainties that make collaboration risky arise from three primary

sources: the nature of the problem affecting local governments and their citizens; the

characteristics and interest of the jurisdictions affected, and the existing set of legal-

constitutional structures that define existing institutions for addressing collective problems.

The nature of the problem. Collaboration risks related to the nature of the good or

service and specific characteristics of the problem range from low to high. Those with the

lowest risk are coordination problems that require information, followed by division problems

that require bargaining and negotiation to resolve; while those with the highest risk are

potential defections that require monitoring and enforcement (Feiock, 2013). Greater risks call

for the use of collaboration mechanisms which impose decision costs and autonomy losses on

participating governments. The specific characteristics of the underlying ICA dilemma may

determine whether more or less costly mechanisms are required to reduce risk. Local officials

decide between alternative mechanisms seeking to produce a collective benefit with the lowest

decision costs and greatest autonomy, but collaboration risks that reduce the likelihood that

the preferred mechanisms will be effective, lead participants to sacrifice autonomy and

decision costs. Community Characteristics. Differences in community characteristics translate

into different incentives for local governments to voluntarily engage in collective action.

Collaborations may fail to materialize because potential partners lack information or have

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incentives to free-ride on the efforts of others (Feiock and Scholz 2010). Conversely,

homogeneity among communities within the metropolitan area reduces risk since they are

more likely to share policy preferences (Feiock 2008; Gerber, Henry and Lubell 2013).

Furthermore, demographically similar communities may also share cultural viewpoints which

minimize risks of cooperation (Feiock 2004; Visser 2002).

When participants’ goals are in conflict, more complex, authoritative solutions may be

needed to generate successful regional governance agreements. Collaboration risks are higher

for ICA dilemmas involving conflicts over goals, not only because actors need to agree on the

division of benefits and costs but also because of potential defection from the agreement. Thus,

social, demographic, racial, and income inequalities diminish the likelihood of successful

collaboration (Feiock, 2013). The larger these community differences, the riskier it becomes to

collaborate. For example, it may difficult for poorer and more affluent communities to work

together since the costs and benefits of the effort will be valued differently in each place.

By contrast, in ICA dilemmas that involve less conflict over goals, the problem is simply

one of coordination on how to achieve these goals. Demographic homogeneity also contributes

to minimizing political and economic power asymmetries between jurisdictions, thereby

facilitating the distribution of gains derived from cooperation (Feiock, 2013).

Legal-Constitutional Framework. The national legal framework determines what

collaborative arrangements available to local governments to structure their collaboration

efforts are used (Parks and Oakerson, 1989). National- and state- or provincial-level rules

define the constitutional set up within which self-governance is organized, which shapes the

15
transaction risks local actors face in pursuing collaborative governance arrangements (Jung et

al. 2018; Taveras and Feiock 2018).

The acceptability of and preference for intergovernmental collaboration are influenced

by each country’s history, institutions culture and traditions. In countries where social capital

ties are strong and there is a tradition of local autonomy, civil, society organizations and

networks can undergird local governance and promote social trust to overcome the

collaboration risks local actors face in self-organizing governance (Granovetter, 1983; Feiock

and Scholz 2010; Tavares and Feiock 2013). In short, more authoritative and complex regional

governance approaches arise to mitigate potential coordination, division, and defection risks.

The Latin America and Caribbean ICA Framework (LAC-ICA)

Our next step is to modify the ICA framework presented in Figure 1 to incorporate the most common

mechanisms in Latin America Although transaction costs are important in ICA theory, this

concept is generally central to understanding regional integration mechanisms in LAC.

Mechanism costs and collaboration risk are both salient. Mechanism costs include the loss of

autonomy and cost of decision making involving multiple actors. These are called mechanism

costs because they are an inherent function of the specific institutions for collaboration.

Complexity and costs of decisions are lower when regional collaborations involve only a single

policy or issue. Likewise, transaction costs are less when collaborative arrangements preserve

or increase the autonomy of local actors.

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 Figure 3 below reproduces that classification of ICA integration mechanisms

introduced earlier as Figure 1. On the basis of a review of the literature and our case studies,

we are define four generic regional integration mechanisms to fit the LAC context to illustrate

the importance of mechanism transaction costs.

Figure 3:
Mechanisms for the Incorporation of ICA Dilemmas in Latin America

The vertical axis of Figure 3 captures decision costs related to the scope and complexity of the

decision-making process for addressing a regional ICA dilemma. Decision costs include the

design and negotiation of a collaborative agreement capable of overcoming collective action

problems and managing task diversity and complexity. The greater the number of governments

that need to work together and the more issues addressed, the higher these costs are (Feiock,

2013). In the US, decision costs are primarily a function of the whether an agreement is

bilateral or multilateral. Since bilateral agreements are much less common in Latin America,

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the vertical decision costs dimension is primarily defined by whether collaborations involve a

single or multiple issues.

The horizontal dimension is a continuum of authoritativeness for collaboration

mechanisms. To the left are arrangements among governments in a metropolitan area that are

less formalized and more voluntary. To the right are arrangements imposed by a higher level

of government or involving local governments voluntarily delegating responsibility to a regional

organization or authority. In the US, the legal and historical transition of local autonomy means

that shifting control to a regional level authority entails sacrificing at least some degree of

autonomy. This is not the case in LAC. Where there is a history of limited local control,

centralization and national government dominance, a metropolitan level government can be

seen as empowering to local governments by bringing responsibility closer to communities.

This is the autonomy costs of a mechanism depending on the original constitutional setup.

The differences between nations with a federal system and centralized national

government are important when viewed from the perspective of this transaction cost-based

framework. In more centralized systems there are more options for regional integration. A

uniform governance arrangement created by a central authority can encompass a larger set of

actors in the region and reduce uncertainty. For example, the use of “Macroprojectos” is a way

in which the national government in Colombia coordinates efforts in the metropolitan region of

Bogotá.

The historic centralization of power via informal or political institutions could help to

reduce mechanism costs by imposing arrangements such as the one that handles

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transportation in Monterrey, where the state government takes over municipal functions by

creating organizations such as Fomento Metropolitano de Monterrey as well as the Integrated

Metropolitan Transit System. An important distinction for Latin America, unlike the US, is that

metropolitan-level institutions do not necessarily reduce autonomy. In political systems

without a history of local autonomy, and where authority is centralized at the national level,

regional governance institutions can bring power closer to cities and increase their autonomy.

Cross-classifying these two mechanisms costs produces four types of integration

mechanisms for metropolitan areas in Latin America: Multiplex Collective Action, Targeted

Collective Action, Imposed District Governance, and Imposed Specialized Collaboration.

Multiplex Collective Action reflects mechanisms that encompass multiple service functions and

involve at least some level of voluntary actions among governments in metropolitan areas.

Targeted Collective Action involves voluntary collaborative arrangements focused on a single

service or policy. Imposed District Governance includes national or state level creation of

metropolitan authority with responsibility for multiple services, while Imposed Specialized

Collaboration involves mechanisms created for a single metropolitan- wide service function.

The LAC-ICA framework also requires a different means of calculating collaboration risks.

Collaboration Risk. The second type of transaction cost is collaboration risk – the risk

that more limited or less authoritative collaborations be ineffective because of coordination

difficulties, problems in allocating costs and benefits of collaborations and defection problems

due to free riding or non-participation. As described earlier, ICA theory identifies collaboration

risks as arising from the nature of the problem situation, the interests and preferences of the

actors involved and the existing institutions and political arrangements in place. Characteristics

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of the underlying ICA dilemma, such as whether it involves spillovers, determine whether more

or less costly mechanisms are required to reduce risk. For example, the potential to internalize

negative externalities in areas such as public safety or transportation may drive cooperation. If

local governments have different incentives to voluntarily engage in collective action,

collaborations may fail to materialize because potential partners have incentives to free-ride on

the efforts of others (Feiock and Scholz 2010).

The acceptability of and preference for intergovernmental collaboration are influenced

by each country’s history, institutions culture, and traditions. In countries where social capital

ties are strong and there is a tradition of local autonomy, civil society organizations and

networks can undergird local governance and promote social trust to overcome the

collaboration risks local actors face in self-organizing governance (Granovetter, 1983; Feiock

and Scholz 2010).

The extent to which there is shared regional identity among residents across

metropolitan areas is important for collaboration. For example, in the case of Monterrey, there

is an entrepreneurial culture that facilitates coordination. Residents from different cities value

being from Monterrey more than being from a specific city in the metro area. This situation

makes it easier for mayors to promote policies that benefit the entire urban area. The situation

is different in cities like Bogotá, where constant migration from rural areas as well as from

other cities has deterred the formation of a single identity for residents. For instance, in cities

like this, it is more difficult for actors in wealthier communities or cities to promote policies that

could be seen as subsidizing other lower income jurisdictions in the metropolitan area.

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 As regards the homogeneity of culture and identity, ICA theory argues that differences

in preferences across communities produces collaboration risk barriers to collaboration and

regional governance. Homogeneity among communities can reduce risk, since they are more

likely to share policy preferences (Feiock 2008; Gerber, Henry and Lubell 2013).

Demographically similar communities may also share cultural viewpoints, which minimizes

cooperation risks (Feiock 2004; Visser 2002). Poverty and the enormous economic disparities

among governments in the large metropolitan areas of LAC increase the severity of

collaboration risks. Unlike the US, where racial and employment differences are often more

important, economic inequality is the main factor that creates divergent service preferences,

which in turn makes joint actions difficult. Economic inequality was found to be a major barrier

to integrative regional governance in all the metropolitan areas we examined.

Heterogeneity plays an important role in disincentivizing collaboration in LAC. The

main source of heterogeneity in metro areas is social inequality across jurisdictions. The

political costs of cooperating in extremely heterogenous metro area are high for elected

officials if their constituents believe they are subsidizing other municipalities. In cases where

metropolitan cooperation is observed, there is often some form of subsidy provided by a

higher level of government. When there is a conflict of goals among participants, more

complex and authoritative solutions may be needed to create successful regional governance

agreements. For example, the creation of the Autonomous City of Buenos Aires illustrates how

national governments can create consolidated districts for service provision. The existing

political system and institutions also influence collaboration risks. Across Latin America there is

substantial variation in administrative capacities. Variation in administrative capacities

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increases interaction costs between public officials because finding solutions for metropolitan

problems often requires sophisticated technological solutions. Moreover, the lack of

professional public officials does not allow for easy interaction among actors who do not share

professional values or a homogenous framework for conceptualizing problems and solutions.

Professional and technical capacity is often insufficient in local and regional

authorities. Political parties partially fill the void created by low technical capacity. It is not

uncommon for powerful elected local officials or distinguished party leaders to act through

parties to distribute the benefits and costs of contributing to collective action efforts in the

absence of formal institutional arrangements. Sometimes these efforts only help party

members. The role of mayors in LAC and their political ambitions can also shape collaboration

efforts with or without formal institutions. Local officeholders view decisions whether or not to

engage in intergovernmental cooperation as avenues for promoting their political careers. Two

different theories in the literature on intergovernmental cooperation posit two quite different

expectations as to how intergovernmental cooperation affects electoral trajectories. According

to one view, local elected officials seeking a higher position (especially higher political offices

that represent a larger geography) may pursue intergovernmental relations as a way of

promoting themselves among a larger constituency, as is common in cities such as Bogotá,

Santiago or Monterrey, where mayors often become prominent national political figures with

strong political aspirations for higher office. Adjusting the concepts and assumptions of the

LAC-ICA Framework provides a lens for a better understanding and interpretation of

metropolitan governance arrangements. The next section applies the framework to

transportation systems in four LAC metropolitan areas.

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 Transportation Systems in Four Latin American Metropolitan Areas
LAC show a large spectrum of institutional arrangements to deal with metropolitan issues

ranging from informal policy networks to single service metropolitan authorities or

metropolitan districts. Given that the metropolitan problem is a relatively recent phenomenon,

most of the institutions are informal. Mesa Bogotá-Cundinamarca is a clear example of the

formation of informal institutions for discussing metropolitan topics of metropolitan relevance.

The creation of metropolitan authorities usually revolves around topics such as transportation

or the environment where the positive or negative externalities produced by a lack of

metropolitan perspective is more evident to stakeholders and voters. In countries such as

Colombia or Mexico, the statutory framework for local governments allows the creation of

some kind of metropolitan bodies but the provision of this permission is not sufficient for the

creation of these bodies.

Although providing an extensive survey is beyond the scope of this report; in the

following section we identify some of the institutions in four LAC countries. However, this

section provides a more detailed institutional descriptions and case analysis of four

metropolitan areas in terms of local and metro governance arrangements for four major

metropolitan regions of Latin America - Bogotá, Buenos Aires, Monterrey and Santiago. For

each metropolitan city, the institutional structure and system of local governments is described

to identify the level of fragmentation authority in government. The larger metropolitan area

the city anchors and inter-city relationships in the area are then described. Mobility and

metropolitan public transit are examined within each metropolitan area. This case analysis

23
provides the building blocks to identify how the nature and degree of collaboration risks

influence ICA mechanisms in these metropolitan areas.

Metropolitan Area of Bogotá

Local governments

The Political Constitution of Colombia declares that the state is unitary and administratively

decentralized, and that the exercise of power is divided into three branches: the legislative, the

executive and the judicial, as well as autonomous and control agencies, such as the Comptroller

General of the Republic. The republic is territorially divided into 32 departamentos, in addition

to the capital district of Bogotá1, where the seat of the central government is established. The

smallest administrative unit is the municipality and/or district, of which there are over 1000 in

the country (Duque, 2010; Gobierno de Colombia, 2018). The president is the most important

figure, since he represents the supreme administrative authority and is able to suspend or

dismiss governors of the departamentos, elected by vote, for a four-year period, with no

possibility of re-election (Gobierno de Colombia, 2018).

According to Article 298 of the Constitution, departamentos are autonomous as regards

the management of their economic and social development. In addition to the governor, each

departamento has its own assembly. It also notes that, “They perform administrative and

coordination functions, and ensure the complementarity of municipal action, intermediation

between the Nation and the municipalities and the provision of services determined by the

1
Since 1954, Bogotá stopped being the capital of the department of Cundinamarca to become a Special District.
Currently, it contributes 25% of the national GDP (Sanabria, 2018).

24
Constitution and laws” (Gobierno de Colombia, 2018). Departamentos therefore serve as a

bridge in intergovernmental as well as in inter-municipal relations (Duque, 2010). Health,

education, water and sanitation services must be directly provided by this area of government

to their municipalities, through the resources transferred by the national government (Duque,

2010).

Also, each municipality is governed by a mayor and a municipal council, elected by

popular vote for four-year periods. The president and the governors have the power to suspend

or dismiss mayors (Gobierno de Colombia, 2018).

Article 3 of Law 136 of the General Principles of the Organization and the Functioning of

the Municipalities lists the functions of municipalities, the most important ones being: the

provision of public services; the design and implementation of municipal development and

territorial planning plans, which must abide by what is stated in the development plans for the

departamentos; the construction and maintenance of public works; the design and

implementation of citizen security plans; the promotion of joint work by the public and private

sectors to economically develop their territories; the promotion of tourism based on the

National Policy; the conclusion of agreements with neighboring municipalities in neighboring

countries, in order to maintain a common agenda on matters of security, economic

development, public services and environmental care; the approval and monitoring of

programs for housing development; the strengthening of ties with indigenous communities and

the publication of the municipal public account on its corresponding website (Gobierno de

Colombia, 2018).

25
 According to Suelt (2008), over time, Colombian municipalities have lost political

autonomy. The current 1991 Constitution limits municipal capacity in political matters because

the national government often makes decisions that have a local impact. Moreover, municipal

authorities are not permitted to undertake legislative activities, which are under the sphere of

Congress (Suelt, 2008). Another example of the restriction of autonomy took place in 2012 with

the modification of Law 1530 on the General System of Royalties (Departamento Nacional de

Planeación, 2012). Collegiate Administration and Decision Bodies (CADB) were created to

decide how revenues from mining should be used for the departamentos and municipalities

(Lozano, 2018).

According to Suelt (2013), the administrative autonomy of local governments in

Colombia is a result of their subordination to the national government, since they collect very

few of their own resources, and innovation in the design of local public policies is not part of

their remit. This situation has increased collaboration risks among local authorities. In this

respect, for instance, the author draws attention to the Law of Land Management (LLM), since

this is a mechanism that manages the deliberate association between municipalities to create

infrastructure. This Law has exacerbated territorial inequality since small municipalities with

few resources of any kind are unable to form partnerships to improve their physical and

economic conditions (2013).

Metropolitan Area

The statutory framework in Colombia has mixed effects on the de transaction costs for the

creation of metropolitan authorities. On the one hand, Article 319 of the Political Constitution

26
of Colombia stipulates the way a metropolitan area can be created: if two or more

municipalities, due to their socio-economic dynamics, make up an area of this nature, they will

be able to become an administrative entity capable of “programming and coordinating the

harmonious, integrated development of the territory placed under their authority, rationalize

public service provision by those who are part of it and, if appropriate, provide some of them in

common; and undertake works of metropolitan interest” (Gobierno de Colombia, 2018)

However, the statutory framework also indicates that a metropolitan area can only arise if it is

accepted by popular consultation in the municipalities involved. Once the area has been

created, mayors and town councils will undertake to define the attributions, financing and

authorities for the new entity (Gobierno de Colombia, 2018).

As a result of the above, the metropolitan area of Bogotá does not exist as an integrated

formal structure, which does not bode well for the efficient provision of public services, such as

transportation (El Nuevo Siglo, 2017). Acevedo (2009) explains that what is established in the

constitutional text, regarding the creation of metropolitan areas by popular consultation, is

politically unfeasible. During the second term of former mayor of Bogotá, Antanas Mockus

(2001-2003), an unsuccessful attempt was made to create the metropolitan region of Greater

Bogotá, through the Mesa de Planeación Regional Bogotá Cundinamarca.

Nevertheless, the Mesa de Planeación Regional Bogotá Cundinamarca (MPRBC) remains

a meeting space that helps reduce transaction costs for collaboration in the metropolitan area.

MPRBC resulted from an agreement signed in 2001 between the City of Bogotá, the

Government of Cundinamarca, and the Regional Autonomous Corporation of Cundinamarca.

The space started as a technical cooperation process to support the construction of technical

27
and institutional capacity in public and private entities that act in the area. It also serves as a

reference for carrying out strategic development actions and projects and build institutional

bases for the management and integrated development of the region.

Despite the rejection of the creation of a metropolitan area that would integrate the

activities of the District of Bogotá and the surrounding municipalities, funding from the national

government has also reduced some transactions costs for municipal coordination. Acevedo

(2009) pointed out that Macroprojects are instruments ordered by the national government,

whose development municipalities are obliged to permit. It is hoped they will streamline the

collective transport system, which, in turn, will contribute to the densification of the city to turn

it into a compact city. In 2007, the issuance of Law 1151 on the Macroprojects provided a new

opportunity for Colombian urban development, since its objective is to:

[...] promote the design and implementation of integral projects that will contemplate

the clearance of land for social interest housing, the provision of public utilities, road networks

for urban, zonal and local integration, public spaces and collective equipment, to develop urban

settlements with high urban and environmental quality parameters. (Acevedo, Behrentz, &

Carrizosa, 2009).

Mobility and Management of Metropolitan Public Transport

Collective transport: buses, metro and cable car. Behrentz explains that in Bogotá, there is a

mobility problem that equates main and secondary roads. The author partly attributes road

congestion to the refusal of the authorities to allow the city to expand. In his view, a dense city

28
creates this type of urban problems. For his part, Acevedo believes that the improved

socioeconomic status of Colombians has increased their ability to afford private vehicles.

The role of the central government facilitating metropolitan solutions could be observed

by looking at the financing of urban mass transportation. Integrated Public Transport System

(IPTS), managed by the state company Transmilenio, operates through private concession

companies with 10 providing trunk service, eight offering feeder service and two responsible

for fare collection (Ciudad móvil, Connexión móvil, Metrobús, Transmasivo, Express del futuro,

SI 99, SOMOS K, Consorcio express, Gmovil SAS, Tranzit SAS, Masivo capital SAS, ETIB, Este es mi

bus, Organización SUMA SAS.). The only way Transmilenio could provide service would be if a

tender were declared void or a contract with a private company were suspended (Transmilenio,

2018). Mass urban transport in the metropolitan area is financed by two areas of government:

national (up to 70% of the total) and local (not less than 30%) (Pardo, 2018).

Despite the creation of a consolidated transport system in the capital district, the

heterogeneity among municipalities outside the capital city increases the transaction costs for

collaboration. Currently, the transition from the traditional transport system, called Provisional

SITP, to the integrated system Transmilenio (Colprensa, 2018), in the peripheral areas of the

metropolitan area, is still underway despite the fact that the goal was full assimilation by 2013.

Failure to meet this goal has led to competition with Transmilenio, which has reduced its profits

and created a financial deficit, the cost of which has been covered by the District of Bogotá

(Kien and Ke, 2017).

29
 According to Transmilenio’s management (2018), its functions are as follows: 1) running

automotive transport in the metropolitan area; 2) assuming responsibility for policies, fees and

preventive measures that ensure good service (incentives or fines, as appropriate ); 3) seeking

the implementation of technology to improve transportation service and minimize

environmental damage; 4) awarding the necessary contracts for the provision of the service; 5)

partnering with other public and private entities to temporarily provide transportation service ;

6) maintaining collaboration with the Mobility Secretariat. Although the Integrated System only

operates in the capital city of Bogotá, one of its routes has recently been extended to Soacha, a

neighbouring municipality in the southwest, to satisfy the demand for mobility in that zone of

the department of Cundinamarca (Sanabria, 2018). This extension outside the capital district is

partly a result of the existence of forums such as MPRBC and the Consejo Regional de

Competitividad used by public entrepreneaurs to promote a metropolitan perspective and

projects with a metropolitan impact.

Although Transmilenio has been a solution with geographic limitations, it has had

positive effects in terms of the service provision. Chaves and Viviescas (2006) explain that

Transmilenio modified the way public transport was regarded and experienced in Bogotá not

only by users, but also by the drivers of the units. This system gives drivers a fixed salary and

benefits, which prevents them from competing on the roads and causing accidents. The

efficiency of the trips means that travel times are reduced by nearly an hour. Moreover, there is

no direct contact between drivers and users, which improves the performance of the former by

avoiding any kind of confrontation.

30
 Moreover, in Bogotá, articulated Transmilenio buses have helped improve public

transport service. However, there has been a great deal of criticism about their inefficiency, the

lack of coordination between the different routes, the low satisfaction of users with the service,

the high number of road accidents and the damage it has caused to the urban image (Hidalgo

D., 2017). According to Molano (2017), the loss of popularity of Transmilenio is due to the low

investment in the maintenance of its infrastructure, coupled with the fact that demand for the

service has imploded.

With the financial support of the national government for building infrastructure, the

raised Transmicable began operating in December of 2018 (Motoa, 2018). Transmicable is a

cable car which, if it works as planned, will cut approximately an hour off the trip made every

day by the Bogotá residents it serves. This is another example of how funding from the national

government has facilitated the reduction of transaction costs for adopting metropolitan

solutions. After several decades of having been discussed and delayed by the political

differences of local governments, Transmicable has been incorporated as an alternative for

mobility for the capital (López, 2018, El Tiempo, 2018 ).

Metropolitan Region of Buenos Aires

Local governments

The Republic of Argentina is a federal state divided territorially into 23 provinces, in addition to

the Autonomous City of Buenos Aires (the capital of the country), with a total of 1178

municipalities and 977 small territories (which can be called municipal or development

31
commissions, townships or governance boards) (Cetrángolo & Jiménez, 2004). Each province is

considered to predate the creation of the national government, and therefore enjoys full

autonomy (Cetrángolo & Jiménez, 2004), except in issues that come within the federal sphere

(InfoLEG, 2018). Each one, except the Province of Buenos Aires, is divided into departamentos,

which only perform administrative functions. Departamentos, in turn, are fragmented into

municipalities. They have powers that the provinces to which they belong confer on them

through their Provincial Constitution, the organic laws issued by the provincial legislatures and,

in some cases, their Municipal Organic Charter (Angeletti, Batakis, & Herrera, 2001; Cetrángolo

& Jiménez, 2004, InfoLEG, 2018), which shows the subordination of local to provincial

governments (Cetrángolo & Jiménez, 2004).

Although Article 123 of the National Constitution states that each province ensures the

autonomy of its municipalities (InfoLEG, 2018), the freedom of the provinces to govern

themselves under their own organizational status allows some to remain subordinate to their

local governments. These provinces are Buenos Aires, Entre Ríos, Santa Fe, Mendoza and

Tucumán. However, in tax matters, in 1988, the province of Buenos Aires began a process of tax

decentralization by allowing municipalities in the metropolitan area to collect a number of

taxes that had previously been their responsibility (Cetrángolo & Jiménez, 2004) in order to

strengthen local management and reduce tax evasion (Angeletti, Batakis, & Herrera, 2001).

The federal and provincial governments are divided into three branches: legislative, executive

and judicial. The executive branch of the former is headed by the president, and the latter, by a

governor. Both serve terms lasting an average of four terms and are elected by popular vote.

32
 At the same time, municipal governments have a legislative and an executive branch.

The municipal legislative branch is governed by a Deliberative Council and the executive one by

a mayor. These posts are also popularly elected for periods of four years. In general, local

governments have the responsibility to provide public services such as garbage collection,

potable water, electricity and street lighting, street cleaning and cemetery maintenance.

Municipalities usually obtain their income from fees for “Lighting, Sweeping and Cleaning,

Inspection, Safety and Hygiene, Conservation and Improvement of the Road Network, Health

Services, Office and Occupation Rights and Utilization of Public Spaces , Fines and Charges and

Fees for Electricity Use “taxes [...] duties, contributions, patents, fines, permits and licenses, the

remainder being transferred from the provincial sphere, which exceeds what is collected within

the municipalities”.

The special case of the Autonomous City of Buenos Aires (ACBA), the seat of federal

powers, began in 1996 when the Amendment to the Argentine Constitution of 1994 came into

effect. Through this mechanism, the City –which was previously a municipality- adopted an

autonomous regime divided into three branches (legislative, executive and judicial), with its

own Constitution or Organizational Statute. The executive branch is led by a Head of

Government. According to Centrángolo and Jiménez, (2004), the ACBA and the Province of

Buenos Aires account for approximately 60% of the national GDP.

Historically, intergovernmental relations in Argentina have been marked by problems in

tax issues and public spending. Since the 1990s, in terms of taxation, the national government

has advocated centralization, while the opposite trend has been followed for public spending

33
(decentralization) (Cetrángolo & Jiménez, 2004). This has created interjurisdictional tension

that increases transaction costs for local public officials when dealing with ICA problems.

Centrángolo and Jiménez (2004) explain that lack of coordination between the three

spheres of government has led to the decentralization of social services, such as education and

public health, which in turn has led to extremely heterogeneous provision. There is a gap

between the provinces and municipalities with greater development and economic strength

and those with less. Accordingly, the authors state that an equitable supply of these services

would depend on additional transfers from the national government.

This highly heterogenous setting has different effects on various policy arenas

depending on the political incentives of public entrepreneurs. Alonso et al. (2016) showed that

coordination between Buenos Aires municipalities in the metropolitan area and higher levels of

government in fact varies according to the sphere of politics. The researchers also observed

that municipal public servants tend to seek the support of the national government for the

implementation of health and environmental programs, since they perceive that their

jurisdictions will benefit from the latter and could claim credit for this management for

electoral purposes.

Also, for inter-municipal cooperation, Mazzalay (2015) stresses that the leadership of

public entrepreneurs seems to be crucial to expanding ties that will make it possible to promote

a common agenda among interested municipalities. An analysis conducted in the Metropolitan

Region of Córdoba enabled the researcher to obtain this finding, although he cautions that this

does not necessarily apply to the rest of the metropolitan areas in Argentina.

34
Metropolitan Area

The Metropolitan Region of Buenos Aires (MRBA) or the Metropolitan Area of Buenos Aires

(MABA) is composed of 34 municipalities (also known as parties) in the Province of Buenos

Aires (Pérez, 2013) and the Autonomous City of Buenos Aires (ACBA). This agglomeration

produces 52% of the national GDP (Subsecretaría de Urbanismo y Vivienda, 2007), is home to a

third of the country’s population and is considered a global city in Mercosur (Malfa, 2004).

Despite forming an area identifiable by its socio-economic and urban dynamics, Malfa (2004)

recognizes the fact that the jurisdictions comprising it are socially heterogeneous.

The MRBA does not have a metropolitan authority to manage its functions as an

interconnected space, despite efforts to create one (Malfa, 2004). However, the provincial

government of Buenos Aires and certain specialists admit that this is necessary (Undersecretary

of Urbanism and Housing, 2007, Gutiérrez, 2011). In order to overcome the lack of

metropolitan institutions, spaces for agreement and interjurisdictional commissions have been

created that deal mainly with the environmental problems of the region (Malfa, 2004).

Examples of these efforts include the Ecological Coordination of the Metropolitan Area of the

State Society (ECMASS), the Metropolitan Transport Agency and the Matanza Riachuelo Basin

Authority (MRBA) (Fundación Metropolitana, 2018).

Another type of space was created in the year 2000: the Metropolitan Foundation. This

is a non-government organization in which members of the public, private and civil society

sectors participate, seeking government recognition of the MABA under Article 124 of the

Constitution. It monitors problems in the region, maintaining an agenda that allows it to

35
strengthen ties with the governments of ACBA and the province of Buenos Aires to promote

new metropolitan policies and programs (Fundación Metropolitana, 2018).

In this respect, the most important government initiative for dealing with MRBA issues

is the Metropolitan Cabinet, created in April 2016. This project is designed to link the

government of the ACBA with that of the Province of Buenos Aires to design and implement

metropolitan policies. It is described as a flexible, non-bureaucratic model responsible for

managing security, health, transport and culture issues (Gobierno de la Ciudad de Buenos Aires,

2018). Members of the Cabinet meet on a quarterly basis (Fundación Metropolitana, 2018).

In October 2016, the Argentine government formed the Advisory Commission for the

Metropolitan Area of Buenos Aires (ACMABA). This body - managed by the federal government,

through the Ministry of the Interior (Pérez, 2013) - can be understood as a complement to the

Metropolitan Cabinet. ACMABA is run by three public servants in each jurisdiction comprising

the metropolitan area (Fundación Metropolitana, 2018).

Mobility and Management of Metropolitan Public Transport

Collective transport: buses, metro and train. The public transportation system is highly

fragmented in the metropolitan area, with limited interaction among local jurisdictions for its

operation2. The lack of an adequate statutory framework for collaboration among local

2
Currently, in agreement with the Undersecretariat of Town Planning and Housing , the metropolitan
management of transport is divided into competences for the various government orders involved, namely:
•National government. The Undersecretariats of Automotive Transport and Rail Transport have jurisdiction over
the national lines of motor transport and trains in the AMBA and provide the regulatory framework for their
operation. The National Commission of Transport Regulation is responsible for inspecting motor transport and the
trains administered by the national government, as well as the ACBA subway.
•Provincial government. Firstly, the Provincial Department of Transportation, which depends on the
Undersecretariat of Public Services of the national government, is responsible for controlling the provincial lines of

36
governments appears to generate high transaction costs for coordination between local

governments. According to Gutiérrez, (2011), the mass public transport system in the area

consists of 814 km of railways -where urban, suburban and interurban trains circulate-, 365 bus

lines and 54 km of metro tracks. The author emphasizes that buses are the most important

form of transport for the inhabitants of the metropolitan area (80%, according to the

Undersecretariat of Urbanism and Housing of the Province of Buenos Aires). They are operated

by various private companies under concession schemes, whose administration is divided into

three spheres of government, with no coordination between them (Gutiérrez, 2000, Gutiérrez

& Rearte, 2003, Undersecretariat of Urban Planning and Housing, 2007, Gutiérrez, 2011). This

fragmentation is not limited to the authorities but also exists among transportation service

providers. Pérez (2018) points out that the organizational structure of the collective transport

system in Argentina has changed over time. First, it was a family business, i.e. a person or family

owned one or more buses. Later, four types of associations were formed: 1) corporations

managing a single line or route (monolines); 2) multi-line corporations; 3) groups, i.e. different

motor transport. Secondly, the Provincial Department of Roads, subsumed under the Undersecretariat of Public
Works, is responsible for the maintenance of provincial roads in the suburbs. Lastly, the Technical Vehicle
Verification and Psychophysical Examination Entities have the power to grant licenses and authorize drivers.
•Government of the ACBA. This government does not have many responsibilities in the area of transport, an issue
mainly dealt with by the national government, through the Undersecretariats of Transit and Transport, and Works
and Maintenance. The former regulates the transit of private, collective and articulated vehicles, and issues driving
and taxi licenses. The latter maintains thoroughfares and streets. The only agency operating within this area of
government to act on the transport system is the Public Services Regulating Entity. It is responsible for monitoring
the quality of public transport offered by the national or subnational administration in the City.
The creation of the Center for Monitoring and Management of Urban Mobility was announced in early 2018. This
entity would be responsible for monitoring traffic in the capital in real time to inform residents and obtain data to
design policies to improve mobility in the ACBA (Corsalini, 2018).
•Municipal governments. The parties that form part of the Conurbano of the Province of Buenos Aires are
responsible for regulating the motor transport lines that circulate exclusively in their territory, granting licenses for
taxis and maintaining roads.

37
corporations headed by a single organization); and 4) two or more merged groups, which have

diversified their activities towards the sale of insurance for transport units.

The national government makes a limited contribution to coordinating services by

providing subsidies for public transportation. Collective motor transport service has been

subsidized by the national government since the 2001 economic crisis (Pérez V. , 2018). The

subsidy operates in two ways: directly, through the number of passengers transported,

kilometers traveled and fares collected; and indirectly, through the reduced price of gasoline

used. Fares only cover 40% of the cost of the service, with the remaining 60% being paid for by

government subsidy (Subsecretaría de Urbanismo y Vivienda, 2007). Moreover, since 2009,

payment for the use of collective transport has been made through the Single Electronic Ticket

System -better known as the personalized, prepaid SUBE card -administered by the national

government, through the Banco de la Nación Argentina (Gobierno de Argentina, 2018). The

main objectives of integrated payment are to promote public transport, since, after they have

made their first trip, users have a 50% and 75% discount on subsequent trips within a maximum

of two hours; and to obtain information on public transport users to focus and streamline the

subsidy for this item (Fundación Metropolitana, 2011, Mesquida, 2018).

As in other cities in LAC, private and state enterprise have helped reduce the transaction

costs of collaborating for local governments. Since 1994, the Subte or metro has been operated

by the Metrovías company, through a concession granted by the government of the City of

Buenos Aires (Metrovías, 2018). Like the trains, the metro is disconnected from the rest of the

transport system in the metropolitan area and its coverage is restricted to ACBA.

38
 A couple of Metrobús lines are operated by the government of the City of Buenos Aires

and the remainder by the national government. This transport alternative, built in 2011, consists

of a set of articulated buses that circulate through ten exclusive straight lanes, operating 24 hours

a day, every day of the year (City of Buenos Aires, 2018, Giambartolomei, 2018, Silva, 2018).

Currently, part of the Metrobús also runs in the Province of Buenos Aires, due to a coordination

effort between the CABA and some neighboring municipalities forming the conurbation (Pérez

V. , 2018).

Gutiérrez (2011) explains that the mass transport system faces a major challenge due to

population growth and, therefore, the territorial expansion of the MRBA. The growing demand

for bus service in the periphery has not been matched by the quantity of these vehicles in

circulation. This is compounded by the fact that car use is on the rise, while collective transport

use is falling (Subsecretaría de Urbanismo y Vivienda, 2007).

As expected by the ICA framework, the collaboration risk of ceding a degree of

autonomy has become a substantial deterrent for collaboration. In 1998, an attempt was made

to interjurisdictionally coordinate the public transport system of the metropolitan region,

through the Transport Coordination Entity of the Metropolitan Area (TCEMA). This entity would

consist of the executive powers of the four levels of government, and its mission would be to

propose policies for the improvement of transport. In other words, it would serve as an

advisory rather than an implementing unit. However, its implementation was not successful

(Undersecretariat of Urbanism and Housing, 2007). For Kralich, the repeated failure of ECOTAM

is due to the resistance of the jurisdictions to delegate some of their competences, although

they have political affinity (Centro Tecnológico de Transporte, Tránsito y Seguridad vial, 2012).

39
In a recent effort by the federal government to reduce transaction costs for collaboration

among local governments, in December 2015, the federal government decreed the creation of

the Ministry of Transport (to replace the Ministry of the Interior and Transport). The

responsibility of the new Ministry in the issue of metropolitan management is to foster

coordination between the various transport systems (InfoLEG, 2018).

Today, collaboration within a highly fragmented transportation arena is supposedly the

responsibility of a Metropolitan Transportation Agency. The Agencia Metropolitana de

Transporte is a consultative body, consisting of three representatives, of the national

government, the government of the province and the Buenos Aires government, to improve

mobility in the Metropolitan Region. Its function is to coordinate mobility and road safety

policies between the three governments to solve the interjurisdictional problems regarding

public transport.

Metropolitan Area of Monterrey

Local governments

The United States of Mexico (also called the Mexican Republic) is a federal state. Territorially, it

is divided into 32 states; one of which is the capital of the country, Mexico City (hereinafter

CDMX) (Hidalgo D., 2018). Article 115 of the Constitution states that each federative entity

(state) is politically and administratively organized into free municipalities (Hidalgo D., 2018).

The federal government is led by the president, state governments, by governors and local

governments (town councils) by municipal presidents (Hidalgo D., 2018).

40
 Each state is autonomous, since it has its own Constitution. According to Article 115,

Paragraph 1, local legislatures (the state legislative branch) issue municipal laws and are

authorized to relieve the Town Halls -or any of their members- of their jurisdiction, when a

serious offense is committed that is included in the state law (Cámara de Diputados, 2018). For

their part, municipalities are able to issue their own administrative regulations, according to the

laws of the states to which they belong.

Likewise, section III of the same article lists the public services municipalities are obliged

to provide to their inhabitants; namely: drinking water, drainage, waste treatment, street

lighting, street cleaning, market and wholesale fruit and vegetable market management,

cemeteries, slaughterhouses, park care, public safety and preventive police. They are also

obliged to offer the services state laws provide for, depending on the financial and

administrative capacity of their municipalities. Moreover, in order to leverage economies of

scale, the same paragraph stipulates that two or more municipalities can coordinate to provide

public services. If the case involves the local governments of two or more states, state

legislatures would be required to approve this partnership (Cámara de Diputados, 2018).

For their financing, section IV establishes that municipalities may collect their revenue

from sources that local legislatures specify in the Municipal Income Laws. They also have the

authority to control the public accounts of their local governments. For their part, Municipal

Expenditure Laws are issued after City Councils have approved them (Cámara de Diputados,

2018). According to Sosa (2012) and Mendoza (2016), Mexico is a federation with an obvious

attachment to fiscal centralization and the formulation of public policies. Although since 1980,

41
some policy spaces, such as education, have been decentralized, the federal government still

concentrates much of the decision-making power that subordinates other government areas.

The functions of local governments -together with public service provision- are as

follows: managing the land uses of its territory, formulating urban development plans,

regularizing land ownership in urban areas, granting construction permits, participating in the

creation and management of ecological reserves, becoming involved in the design and

implementation of public transport programs within their jurisdiction, and signing agreements

with the national government for the protection of federal zones (Cámara de Diputados, 2018).

In Mexico, municipalities have limited financial and human resources for performing the

functions within their remit (Arellano & Cabrero, 2011, Sosa, 2012, Díaz, 2014). Sosa (2012)

attributes the material vacuum in this area of government to the lack of interest on the part of

the federal government in modernizing the smallest units in the country during the 20th

century. However, there are enormous differences between municipal shortcomings, since

some municipalities have an advantage because of the natural resources they possess and their

geographical position, creating an urban hierarchy (Sosa, 2012).

Metropolitan Area

The Political Constitution of Mexico considers the possibility of two or more urban centers from

two or more federated states forming a partnership due to the progressive formation of a

metropolitan area. In this case, the three orders of government must coordinate to manage the

development of this space in accordance with federal law (Cámara de Diputados, 2018).

42
 The Metropolitan Area of Monterrey (MAM, located entirely in the state of Nuevo León)

is recognized by the National Institute of Statistics and Geography (INEGI), the National

Population Council (CONAPO) and the Secretariat of Social Development (SEDESOL), and

comprises twelve municipalities, inhabited by over three million people (Cámara de Diputados,

2018). This metropolitan area is the third most populous in the country –nine out of every 10

inhabitants of Nuevo León live in the MAM- and just over 10% of the total population is over 65

(Pérez, 2013, Fuentes, 2014).

According to Pérez (Cámara de Diputados, 2018), the limits of the MAM were

established on the basis of the Urban Development Master Plan of the Metropolitan Area of

Monterrey in November 1988, after five years of dialogue. The document that revitalized the

Master Plan is the Metropolitan Urban Development Plan for the Conurbation of Monterrey

2000-2021. However, it omitted three of the twelve municipalities that CONAPO, INEGI and

SEDESOL recognize as part of the metropolitan area.

This urban space does not have a metropolitan authority to manage its activities.

However, the state government has taken on the transaction costs of creating institutional

arrangements for the provision of some public services. Some metropolitan organizations

responsible for handling various policy areas are: firstly, regarding the issue of housing, the

Fomento Metropolitano de Monterrey (Fomerrey) - created in 1973 - is an organization

responsible for regularizing land tenure for its urbanization, its priority being low-income

sectors (Gobierno de Nuevo León, 2018), irregular settlements having been one of the main

problems of this metropolitan area since the 1960s (Infante & Valles, 2015).

43
 Second, in environmental matters, the Comprehensive Environmental Monitoring

System (CEMS) has been responsible for monitoring pollution levels in the MAM since 1992.

The CEMS has monitoring stations throughout the metropolitan area (Gobierno de Nuevo León,

2018). Third, regarding the management of drinking water and the drainage network, the

decentralized public utility Servicios de Agua y Drenaje de Monterrey -created by decree in

1956- is responsible for providing public water and sewerage services to municipalities in the

metropolitan area (Gobierno de Nuevo León, 2018). Lastly, in terms of mobility, the MAM has

an agency and a strategy for solving the problems of this policy space. On the one hand, the

Trust for the Integrated Metropolitan Transit System (TIMTS) is a unit responsible for

monitoring the operation of traffic lights and putting up road signs in the metropolitan area

(Gobierno de Nuevo León, 2018).

On the other hand, the consolidation of the Integrated Metropolitan Transport System

(IMTS) is one of the strategies of the state government of Nuevo León, implemented by four

state agencies: Public Works, Sustainable Development, the Collective Transport System and

Infrastructure. Some of the objectives of the strategy are the development of the Metrobús,

expanding the Metrorrey network and inviting concessionary companies to use existing

railways as a transport alternative (Gobierno de Nuevo León, 2018).

Mobility and Management of Metropolitan Public Transport

Collective transport: buses, metro and train. The collective transport system of Monterrey is a

clear case of a consolidated and imposed district of the ICA framework. The system is

administered by the decentralized Metrorrey Collective Transportation System (MCTS) and the

44
Under-Secretariat of Mobility and Transportation, which is answerable to the Secretariat of

Sustainable Development of the state (Casas, 2016). For the purposes of metropolitan public

transport, the MCTS is the most important secretariat, since it manages the Metro, the

Metrobús -also known as the Ecovía-, the Transmetro and the Metro Link (H. Congreso del

Estado de Nuevo León, 2006).

The MCTS is subsumed under a larger group, the Integrated Metropolitan Transport

System (IMTS). This system covers all the means of transport and infrastructure allowing

mobility in the MAM and transits through trunk, feeder, diffuser, and intersector routes, as well

as the MCTS. It can operate in two ways: by concession or direct administration by the State.

The components delegated to private enterprise for their operation are: trunk routes, feeders,

diffusers, intersector routes, the metro, the Ecovia, MetroEnlace and Transmetro. Private

enterprise is also responsible for the fare collection system, station maintenance and exclusive

lanes (H. Congreso del Estado de Nuevo León, 2006).

The Under-Secretariat is responsible, among other things, for managing concessions to

private companies, providing service in the metropolitan area; setting their rates (except for

Transmetro, which is authorized by Metrorrey); being responsible for the State Public Transport

Information and Registration System and coordination of IMTS (H. Congreso del Estado de

Nuevo León, 2006).

Despite the strong level of autonomy for municipalities provided by the constitution, the

state government has created a statutory framework that imposes a single purpose district

under the state authority. In accordance with the Transportation Law for Sustainable Mobility

45
of the State of Nuevo León in force, some of the faculties of the state government in matters of

public transportation include: coordinating actions for the improvement of this service and

granting concessions for all modalities of traditional state transportation.

Castillo (2015) found that the role of the governor is central to making decisions on

metropolitan transport despite this being commonly a municipal function. Likewise,

concessionaires are key agents for negotiating possible modifications to the transportation

system. Not so municipalities, which, despite forming part of the State Council of Transport and

Roads (SCTR), do not influence decisions involving this issue, except, for example, granting

rights of way for the construction of exclusive lanes for the Ecovía.

The metro consists of three lines and is connected to the rest of the transportation

alternatives. Due to population growth, however, some coverage of this medium is now below

an optimum level for satisfying the mobility needs of the inhabitants of the metropolitan area

(Prieto, 2010). At the beginning of 2018, the Secretariat of Communications and Transportation

announced an investment of over five billion pesos to expand the Monterrey metro (Mendieta,

2018). The outgoing federal government (2012-2018) was characterized by prioritizing the

development of railway transport (Castillo, 2015).

The Ecovía (Metrobús) has a length of 30 km and 42 stations. It began to be

implemented during the administration of Governor Rodrigo Medina in 2011 and responded to

the interest of the federal government of Felipe Calderón - and, consequently, to the

availability of financing - in developing BRT corridors in the country (Castillo, 2015). Despite

only having been in operation for a few years (four years, since 2014), the population is

46
unhappy about the inefficiency of the service and the lack of transparency in its administration.

Castillo (2015) points out that the implementation of Ecovía was an experiment and did not

meet the goal of creating an integrated public transport system for the AMM. Additionally, the

author argues that this BRT, unlike other cases, did not displace the traditional public transport

service, but established a disarticulated route, which could explain its inefficiency.

As in other cities, payment systems have provided some level of coordination for the

system. In the case of Monterrey, fare payment is integrated through the Feria card and the

organization in charge of its administration is the Agency, as part of the SITME-. In other words,

the first payment made covers subsequent trips of users during the day (made consecutively),

but charges from one means of transport to another may differ depending on the destination

(Gobierno de Nuevo León, 2018).

Metropolitan Region of Santiago

Local governments

The Republic of Chile is a unitary State, territorially divided into 15 regions, subdivided into 54

provinces which, in turn, are fragmented into 342 townships [according to Article 118 of the

Political Constitution; the local administration of a township is called a municipality]. The

president governs the Republic; regions are governed by intendants, and provinces by

governors, both being directly designated by the president. Lastly, townships are administered

by mayors and councilors who, since 2013 (Toledo & Valenzuela, 2017), have been elected by

popular vote every four years.

47
 According to Article 1 of the Constitutional Organic Law of Municipalities 18.695,

“municipalities are autonomous public law corporations, legal entities with their own assets,

whose aim is to satisfy the needs of the local community and ensure their participation in the

economic, social and cultural progress of the respective townships” (Biblioteca del Congreso

Nacional de Chile, 2018). Article 5 lists the responsibilities of townships that enable them to

perform their functions.

In this respect, Fernández (2013) points out that townships maintain two types of

relations, involving both subordination and coordination. First of all, townships maintain a

subordinate relationship with both spheres of government in finances, because they must keep

their accounts according to the instructions established by the Comptroller General of the

Republic. This organization is also authorized to oversee township funds and investments, and

in human resources, it is authorized to supervise personnel employed in local administrations

and to sanction them in the event they commit an offense against township property.

Property tax, vehicle licenses and trade certificates are the main sources of income of

the townships (Hölzl and Nuissl 2014). In addition to these resources generated within the

townships themselves, they receive resources from their respective regions and the central

mechanism for financial redistribution, called the Municipal Common Fund (MCF). Although this

is an organizational model linking all government spheres in order for them to perform their

functions, the predominance of central government is clearly reflected in the public spending

disbursed (85%), compared with that of regional (5%) and municipal spheres (10%) (Toledo &

Valenzuela, 2017). Arriagada et al. (2010) explore the issue of municipal finances in Chile,

noting that the income and expenditure of the townships are in no way homogeneous and on

48
the contrary, that there are enormous differences affecting their effectiveness as local

administrations.

As a means of offsetting the absence of a metropolitan authority, Article 90 of the

Constitutional Organic Law on Government and Regional Administration 19.175 provides a

relevant statutory framework to allow coordination between the central government, through

the ministries, regional governments and municipalities for dealing with metropolitan affairs.

For the purposes of this legal instrument, a metropolitan area is defined as “the territorial

extension formed by two or more population centers linked together by built-up spaces [sic],

which share the use of various infrastructure and urban service elements” (Biblioteca del

Congreso Nacional de Chile, 2018).

Moreover, townships maintain relations of coordination, because the statutory

framework explicitly allows them to associate. Article 118 of the Constitution states that

municipalities can combine efforts to perform their tasks, such as the provision of public

services. For its part, the Constitutional Organic Law of Municipalities 18.695, in Article 8, states

that:

coordination between the municipalities and between them and the public services

that act in their respective territories, will be undertaken through direct

agreements between these organizations. In the absence of agreement, the

corresponding provincial governor will arrange the necessary measures for the

required coordination, at the request of any of the mayors interested (Biblioteca del

Congreso Nacional de Chile, 2018).

49
 Moreover, this Law allows townships to associate with other government entities to

provide “education, culture, public health, environmental protection, social and legal

assistance, training and employment promotion, productive development, tourism, sports,

recreation, urbanization, urban and rural roads, social housing construction, transport and

public transit, risk prevention, emergency or disaster relief and citizen security (Fernández,

2013). However, in practice, coordination between municipalities and with higher levels of

government is difficult due to the lack of cooperation between the various local administrations

(Holzl & Nuissl, 2014, Toledo & Valenzuela, 2017).

However, Arriagada et al. (2010) and Fernández (2013) underline the existence of a

problem of inequality in the administrative capacity of Chilean townships, which have the

potential to raise transaction costs for metropolitan coordination and increase collaborative

risks. The author explains that, while municipalities such as Santiago have a staff of over a

thousand, smaller municipalities have only fifty, making it difficult for them to perform the

functions required by the Constitution. Pacheco et al. (2013) take up the findings of Rodríguez

and Ormeño (2007) on the financial management of Chilean municipalities. The researchers

found-through the construction of an index that includes the level of municipal financial

autonomy, its solvency, and dependence on the MCF, among other indicators-that just 3% of

townships have a municipality with good or very good performance.

Likewise, some researchers have explored the capacity of municipal information

management. Arriagada et al. indicate that there is a correlation between the level of poverty

and the amount of population in the townships and the need to use Information Technologies

(ICTs) to manage municipalities: the greater the poverty level and the smaller the population,

50
the lower the need to use ICTs; whereas with a higher socio-economic level and more

population, ICTs are necessary for local management. For Fernández, the law must consider

differentiated responsibilities and functions among the townships, to enable them to adapt to

the prevailing conditions in municipalities with or without an abundance of resources.

Metropolitan Area

The Metropolitan Region of Santiago (MRS) is one of the fifteen regions comprising Chile and

the seat of the Executive Branch and the Supreme Court. It is territorially divided into six

provinces which, in turn, are subdivided into 52 townships; there is no metropolitan authority

that manages its activities as a territorial space. Santiago is the sixth largest city in South

America and home of 40% of the country’s population (Pliscoff, 2018). The MRS is dedicated to

the services sector (Matus, 2018) and considered a global city. The main problems facing the

metropolis of Santiago are pollution, transport management, waste management, a shortage of

parks and public safety (Toledo & Valenzuela, 2017). According to some authors, Santiago’s

residents have a similar culture to Monterrey in the sense that the city is fairly open to the

participation of the private sector in various areas, such as transport and urban development

(Holzl & Nuissl, 2014).

As a means of offsetting the absence of a metropolitan authority, Article 90 of the

Constitutional Organic Law on Government and Regional Administration 19.175 provides a

statutory framework that reduces some of the transaction costs of coordination between the

central government, through the ministries, regional governments and municipalities for

51
dealing with metropolitan affairs. For the purposes of this legal instrument, a metropolitan area

is defined as “the territorial extension formed by two or more population centers linked

together by built-up spaces [sic], which share the use of various infrastructure and urban

service elements” (Biblioteca del Congreso Nacional de Chile, 2018).

Nevertheless, the centralized management of public affairs has been a topic of frequent

debate. For instance, in April 2014, a Presidential Advisory Committee was formed with the

goal of formulating a law for the political and administrative decentralization of the Chilean

government. Regarding the metropolitan areas, the Commission proposed that their

management be the responsibility of the regional governments, with the support of the mayors

involved. In each case, the Commission proposed that a metropolitan area would have a

Council of Mayors ―which would be led by the mayor of the municipality where the seat of

the regional or provincial government is located― with the power to review and express

opinions on all the metropolitan planning instruments as well as the regional budget proposal

(Comisión Asesora Presidencial en Descentralización y Desarrollo regional, 2014). However,

proposals made by the Advisory Commission were not implemented (Vargas F. , 2017).

Mobility and Metropolitan Public Transport Management

Collective transport: buses, subway and suburban train. The case of transportation in Santiago

exemplifies the role of the national government in imposing a single service district for the

provision of transportation services. The Integrated Public Transport System operating in much

of the MRS (34 regional communes), called Transantiago, began operating in January 2007. This

system is licensed to seven private companies responsible for its operation and maintenance. It

52
is an integrated system because it consists of trunk service, feeder service and the metro. The

creation of the system, as a proposal of the Urban Transport Plan of Santiago (PTUS, in Spanish)

was approved in November 2000, and began operating in January 2007 (Olavarría-Gambi, 2013;

2018). Each concessionary company offers a different type of service and is interested in

measuring the satisfaction of its users (Gobierno de Chile, 2018). The Santiago Metro is

managed by a state company, while the suburban fast train MetroTren Nos is run also by the

state company EFE. Transantiago users pay through a single means of payment: the Bip! Card.

Two trips, made in less than two hours, are charged as if they were a single journey (Gobierno

de Chile, 2018). The administration of these cards, as well as payment to the concessionary

companies and the technological safety of Transantiago, is currently the responsibility of the

Metro Santiago firm after the stock corporation Administrador Financiero de Transantiago

(AFT) allegedly charged high prices for its services (Robredo, 2017).

Public-Private Partnerships (PPPs) in reducing transaction costs. According to Hölzl and

Nuissl (Robredo, 2017), in Santiago, Public-Private Partnerships (PPPs) are the most common

schemes whereby the private sector participates in the provision of public services and

infrastructure construction (Robredo, 2017), as happens with public transport. A propos of this,

Fielbaum, who holds a masters in transport from the University of Chile, argues that the Chilean

government has been unable to develop inter-sectoral management capacities, which prevents

it from controlling the quality of the goods and services produced by private enterprise 3

3
An example of the dissatisfaction PPPs can elicit is what happened with the reconstruction of houses after the
tsunami that occurred in Chile, in 2010. The participation of the private company in reconstruction was disastrous
and the surveillance of the regional and central governments was deficient. The low quality of the new houses
caused enormous discontent among the population, leading to the organization of groups of victims who
protested against this way of solving the problem (Araya et al., 2015).

53
(Robredo, 2018). If the service or good produced ceases to be profitable or does not work as

planned, the private party involved may abandon the deal - provided the terms of its

participation allow this - and the State is forced to assume the blame and the costs (Araya et al.,

2015).

As an imposed service district, the entire system is regulated by the Santiago General

Transportation Coordination Office (SGTCO), an agency answerable to the Ministry of Transport

and Telecommunications (MTT). The functions of the SGTCO include coordinating the public

and private actors that participate in the operation of Transantiago; submitting the guidelines

for bids and the budget plan to the MTT to meet the objectives of the Urban Transport Plan of

Santiago; supervising the bidding processes and transport service contracts and undertaking

studies to improve public transport. The General Coordinator is, in turn, Executive Secretary of

the Committee of Ministers for Urban Transport of Santiago, comprising the Ministers of

Finance, Public Works, Housing and Urban Planning, Social Development, Transport and

Telecommunications and the Mayor of the MRS (Robredo, 2018). The institutional function of

the Committee was to monitor compliance with the SUTP (Holuigue, 2011). In 2013, as part of

the redesign of the transportation system. The Committee was replaced by the Metropolitan

Public Transportation Board (DTPM), which has the central task of integrally manage the

metropolitan public transport (DTPM, 2018).

In Chile, although transport is subsidized4 , its inhabitants tend to think that

Transantiago is expensive, inefficient -some users note that they have to wait up to an hour for

4
The amount of the National Subsidy ―which is divided into two types: permanent, for students, and transitory (it
was supposed to be suspended in 2015 but continued due to the financial instability of the system) for all users―

54
a bus to arrive- and its operation does not seem to recognize the mobility needs of the different

townships, since its management is highly centralized5 (Holzl & Nuissl, 2014; Tables, 2017).

Some users consider that before the implementation of Transantiago, collective transport,

although disorderly, had more efficient routes. Despite the criticisms, some recognize that, over

time, the system has managed to normalize the routes on the main roads of Santiago fed by a

connecting bus service (Matus, 2018).

Conclusion: Intermunicipal Collaboration in Latin America

The metropolitan problem, the artificial fragmentation of single socioeconomic geographic

units, was not a major problem for metropolitan areas in most LAC urban areas until recently.

Until democratic elections became competitive and divided governments were held in these

countries, state or national authorities acted informally as metropolitan authorities. In these

countries, strong political and administrative control of higher levels of government, such as the

national government in Chile or state governments in Mexico, provided a metropolitan

perspective for some issues as well as incentives to relevant actors for solving collective action

problems. This political and administrative environment began to change in the 90’s with more

competitive elections. It was in this new reality that metropolitan coordination and cooperation

became a relevant topic in metropolitan areas in LAC.

to public transport is established by a Panel of Experts, based on Law 20.378, enacted in September 2009.
Additionally, the Panel is responsible for adjusting the Transantiago fee, according to the variations in the operating
cost of the entire system (DTPM, 2011).
5
Although the mayors do not make decisions about the management of Transantiago, some municipalities have
decided to grant free routes in their districts, depending on their financial capacity (Pliscoff, 2018).

55
 Under the new reality, the case analyses of Bogota, Monterrey, Buenos Aires and

Santiago illustrate both similarities to and differences from metropolitan collaboration efforts

in other parts of the word. Analysis of collaboration in these metropolitans provide general

support for the LAC-ICA framework articulated earlier. The case analysis generally confirms the

expectation that mechanism costs and collaboration risks influence the institutional

arrangements in place in each area. Application of ICA allows us to discern the collaboration

risks that are most relevant to Latin America and apply them to understand what factors affect

collaboration in these metropolitan areas.

This section builds from the theoretical framework. the evidence from these four case

analyses and extant research to discuss the range of collaborative arrangements in Latin

America and the tools for promoting and incentivizing collaborate approaches to address

metropolitan problems in the region. Analysis of collaboration in Bogota, Monterrey, Buenos

Aires and Santiago metropolitan areas suggests modifications to the ICA to better fit the types

of ICA dilemmas present, and the specific types of collaboration risks present in large urban

areas of Latin America.

The cases demonstrate specific ways in which transaction costs and the nature and

degree of collaboration risks have influenced the ICA mechanisms in place in each area. The

insights from these cases allows us to glean the collaboration risks that are most relevant to

Latin America and apply them to our framework. We conclude this by discussing the

implication of these analyses of metropolitan governance in Latin America more generally and

advancing an agenda for future study of intermunicipal cooperation in LA. In doing so, this

56
report begins to fill the gaps in our understanding of metropolitan governance and intercity

collaboration in Latin America.

Figure 4 below reproduces the classification of ICA integration mechanisms in Latin

America introduced earlier as Figure 3. From our case studies of four metropolitan regions in

Latin America, we have been able to populate each of the four generic categories with concrete

and specific examples of regional intergovernmental collaboration or integration that illustrate

the importance of mechanism transaction costs.

Figure 4:
Mechanisms for the Integration of ICA Dilemmas in Latin America
+++

Metropolitan Cabinet of Buenos Aires

Mesa de Planeación Regional Bogotá- Autonomous City of Buenos Aires
Multi Issue Cundinamarca
Decision Costs

Integrated Public Transport System of

Bogota (Transmilenio)
Agencia Metropolitana de Transporte Integrated Public Transport System of
---

Single Issue
of Buenos Aires Santiago (Transantiago)
Metropolitan Transit System of Monterrey
(Metrorrey and Ecovía)

Voluntary Coercive

--- Autonomy Costs +++

First, we can observe from Figure 4 that when we look at institutions for the provision of

transportation, the right side seems more populated than the left. On the top right, we can

57
observe the most common response to ICA dilemmas: the adoption of a consolidated district to

deliver public services. This is the case of the creation of autonomous or capital districts such

Colombia or Buenos Aires. However, this is usually a temporary solution imposed by national

governments. In developing countries, capital or central cities are permanent magnets for

immigrants from rural or smaller cities. These waves of migration often settle in peripheral

cities where land is cheaper, making the capital district just another jurisdiction in a much larger

metropolitan area.

The lower right cell contains the most common intuitional arrangement for the

provision of transportation services. This solution is commonly imposed by a higher level of

government, either state, province or national government. In these cases, the transactions

costs of promoting collaboration are internalized by the higher level of government.

Reducing the transaction costs for coordinating services. The cases that fit this characteristic

have limited geographic coverage. For this reason, their expansion to underserved areas of the

metropolis is complicated and often requires the promotion of public entrepreneurs to foster

more collaborative arrangements.

In the cases examined, the left side is less populated than the right. At the top left, we

can observe consultation bodies with representation from different levels of government

intended to generate metropolitan visions to inform public policies. The difference between the

arrangements at the top and the bottom is that the top ones touch on transportation issues as

one of several relevant topics for metropolitan collaboration, while the bottom ones

specifically target transportation and mobility as the main concern of the consultation body.

58
These bodies are significant for the creation of collective intelligence and development of trust

among actors, which are fundamental elements for reducing transaction costs. However, these

decision bodies rarely bring to the table all the actors and interest needed for broad-ranging

metropolitan solutions and lacks the power required to enforce the commitment of

participants to a single course of action.

Although the ICA framework assumes that the institutional framework there is not the

only way of solving collective action problems in the metropolitan area, the cases studied here

suggest that none of the solutions seems appropriate for managing transportation in these

metropolitan areas. It appears that more efficient mechanisms for managing transportation in

these metropolitan areas would require a more centralized governance structure. In this case,

the ICA framework can shed light on which factors limit the choices available to increase

collaboration towards a more optimum arrangement by examining the collaboration risks.

Although transaction costs are important in ICA theory, this concept is generally

central to understanding the regional integration mechanisms in Latin America. Two types of

transaction cost are salient: mechanism costs and collaboration risk. First there are the

“mechanism costs” of loss of autonomy and the cost of decision-making involving multiple

actors. These are called mechanism costs because they are an inherent function of the specific

institutions for collaboration. Where a mechanism involves joint action between just two two

actors, the complexity and costs of decisions are less. Likewise, when they are imposed by a

higher authority, there is a loss of autonomy.

59
 Figure 4 captures decision costs related to the scope and complexity of the decision-

making process for addressing a regional ICA dilemma. The greater the number of issues

addressed, the higher these costs (Feiock, 2013). Governance mechanisms also vary along a

continuum of authoritativeness. Unlike the US examples, we found that in some instances, as in

the case of Santiago, regional institutions have the potential to increase local autonomy by bringing

decision capacity from the national government.

The differences between nations with a federal system and centralized national

government are especially important when viewed through this transaction cost-based

framework. With respect to the legal - constitutional framework, it may be that the main

difference will exist between unitarian and federal governments. In unitary countries, the

national government maintains more power to promote coordination by mandates. However,

in all cases, the tendency has been to give greater autonomy to the levels of government

closest to the people. In more centralized systems, there are more options for regional

integration. A uniform governance arrangement created by a central authority can encompass a

larger set of actors in the region and reduce uncertainty. The central government can use its

authority to foster coordination to deal with metropolitan issues. In addition to the example of

use of Macroprojectos, in which the national government in Colombia coordinates efforts in the

metropolitan region of Bogotá, the Santiago General Transportation Coordination Office (which

oversees Transantiago) is answerable to the Ministry of Transport and Telecommunications.

In federal countries in Latin America, the historic centralization of power via informal

or political institutions could help to reduce mechanism costs by imposing arrangements such

as the one that manages transportation in Monterrey, where the state government takes over

60
municipal functions by creating organizations such as the Integrated Metropolitan Transit

System. In the case of Buenos Aires, the Advisory Commission for the Metropolitan Area of

Buenos Aires is another example of national attempts to coordinate efforts by the national

government.

The cases also provide examples and new insights regarding collaboration risk.

Consistent with the ICA framework, collaboration risks in our cases are linked to the nature of

the problem situation, the interests and preferences of the actors involved and the existing

institutions and political arrangements in place. Characteristics of the underlying ICA dilemma

may determine whether more or less costly mechanisms are necessary to reduce risk. One

factor that may spur cooperation is the potential to internalize negative externalities in areas

such public safety or transportation. If local governments have different incentives to

voluntarily engage in collective action, collaborations may fail to materialize because potential

partners have incentives to free-ride on the efforts of others (Feiock and Scholz 2010).

The acceptability of and preference for intergovernmental collaboration are influenced

by the history, institutions culture, and traditions of each country. In countries where social

capital ties are strong and there is a tradition of local autonomy, civil society organizations and

networks can undergird local governance and promote social trust to overcome the

collaboration risks local actors face in self-organizing governance (Granovetter, 1983; Feiock

and Scholz 2010).

Applied to Latin America, one factor that was found to be important in the case analyses

is the extent to which there is shared regional identity among residents across the metropolitan

61
areas. For example, in the case of Monterrey, there is an entrepreneurial culture that facilitate

coordination. Residents from different cities value being from Monterrey more than from a

specific city in the metro area. This situation makes it easier for mayors to promote policies that

benefit the entire urban area. The situation is different in cities such as Bogotá. In Bogotá,

constant migration from rural areas as well as from other cities has prevented the formation of

a single identity for residents. For instance, in cities such as this, it is more difficult for actors in

wealthier communities or cities to promote policies that could be seen as subsidizing other

lower income jurisdictions within the metropolitan area.

As for the homogeneity of culture and identity, ICA theory argues that differences in

preferences across communities produces collaboration risk barriers to collaboration and

regional governance. Homogeneity among communities can reduce risk since the latter more

likely to share policy preferences (Feiock 2008; Gerber, Henry and Lubell 2013).

Demographically similar communities may also share cultural viewpoints which minimizes

cooperation risks (Feiock 2004; Visser 2002). Poverty and the enormous economic disparities

among governments in the large metropolitan areas of Latin America make collaboration risky

and difficult. Unlike the US, where racial and employment differences are more important,

economic inequality is the main factor that creates the divergent service preferences that make

joint actions difficult. The significant role of economic inequality was found to be a barrier to

integrative regional governance in all of the metropolitan areas we examined.

Heterogeneity plays an important role also disincentivizing in the case of Latin

American countries. The main source of heterogeneity in metro areas is social inequality across

jurisdictions. The political costs of cooperating in a highly heterogenous metro area is high for

62
elected officials if their constituents believe they are subsidizing other municipalities. In cases

where metropolitan cooperation is observed, there is often some type of subsidy provided by a

higher level of government as it happens in the majority of mechanisms on the right side of

figure 3. When there is a conflict of goals among participants, more complex and authoritative

solutions may be required to generate successful regional governance agreements.

The existing political system and institutions also influence collaboration risks. Across

Latin America, there is substantial variation in administrative capacities. Bogotá and Buenos Aires

are clear examples of this variation. Variation in administrative capacities increases interaction

costs between public officials because finding solutions for metropolitan problems often

requires sophisticated technological solutions. Moreover, the lack of professional public

officials does not allow for easy interaction among actors who do not share professional values

or a homogenous framework for conceptualizing problems and solutions. Political parties

partially fill the void left by low technical capacity. It is not uncommon for powerful elected

local officials or party leaders to act through parties to distribute the benefits and costs of

contributing to collective action efforts in the absence of formal institutional arrangements.

The role of mayors and their ambitions can also shape collaboration efforts with or

without formal institutions. Local officeholders view decisions whether to engage in

intergovernmental cooperation as avenues for promoting their political careers. Two different

theories in the literature on intergovernmental cooperation outline two quite different

expectations about how intergovernmental cooperation affects electoral trajectories.

According to one view, local elected officials seeking higher office (especially higher political

offices that encompass a larger area) may pursue intergovernmental relations as a way to

63
promote themselves to a larger constituency, as happens in cities such as Bogotá, Santiago or

Monterrey, where mayors often become prominent national political figures with political

aspirations to advance to higher offices.

Lastly, this report identifies how the variation in the constitutional-legal framework,

local institutions and preferences, homophily within and between communities, and the

interaction between possible governance mechanisms affects the uncertainties and transaction

costs faced by local authorities seeking to establish intermunicipal cooperation. Although these

factors are important for collaboration, the institutional diversity observed is also a product of

the unique historical, cultural, and constitutional-legal factors in various areas of Latin America.

Focusing on these factors allows us to extend the scope and generalizability of the ICA

framework to demonstrate its usefulness in analyzing the factors that facilitate or obstruct the

adoption and implementation of solutions for problems of a metropolitan scope. Its application

to Latin America using examples drawn from four large metropolitan cities in Latin America also

makes it possible to explain the effect of specific factors in these countries such as the culture

of political authority or the lack of local professional civil servants. Moreover, these cases

document both the potential and the limitations of the ICA for understanding the problems of

governmental fragmentation in four prominent metropolitan areas: Bogotá, Buenos Aires,

Monterrey and Santiago.

64
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