This Article Full Text (PDF) All Versions of this Article: 1078087408323939v1 44/3/403    most recent References Alert me when this article is cited Alert me if a correction is posted Citation Map Services Email this article to a friend Similar articles in this journal Similar articles in Web of Science Alert me to new issues of the journal Add to Saved Citations Download to citation manager Request Permissions Request Reprints Add to My Marked Citations Citing Articles Citing Articles via Google Scholar Citing Articles via Scopus Google Scholar Articles by Carr, J. B. Articles by Shrestha, M. Search for Related Content Social Bookmarking                         What's this?

Institutional Ties, Transaction Costs, and External Service Production

Wayne State University, Detroit, Michigan, jcarr{at}wayne.edu

Kelly LeRoux

University of Kansas, Lawrence, kleroux{at}ku.edu

Manoj Shrestha

University of Idaho, Moscow, mks03h{at}gmail.com

Analyses of local government contracting increasingly focus on understanding how the transaction costs created by service attributes limit opportunities for external service production. However, the institutional collective action framework suggests that networks among local government actors help to offset these costs for intergovernmental contracting decisions. We use data describing service production arrangements of cities in Michigan to examine the proposition that service production decisions are conditioned by the communication networks created through institutional linkages in addition to the transaction characteristics of services. We examine three different production options: (1) internal production, (2) joint or complete contracting with another government, and (3) production by a private or nonprofit organization, and find strong support for the expected role of transaction costs in these production choices. We also find that some types of networks created by institutions increase the likelihood that local governments will rely on intergovernmental service arrangements.

Key Words: transaction costs • institutional collective action • contracting • municipal governments • social network • administrative conjunction • intergovernmental • multinomial logit

This version was published on January 1, 2009

Urban Affairs Review, Vol. 44, No. 3, 403-427 (2009)
DOI: 10.1177/1078087408323939


CiteULike    Complore    Connotea    Del.icio.us    Digg    Reddit    Technorati    Twitter    What's this?