Skip Krueger

Competition and Cooperation Among Cities: an Institutional Transaction Cost Approach Skip Krueger

Most cities in America today operate in a fragmented metropolitan system in which they compete with each other for residents and employers in much the same way that private companies compete for customers. Cities regularly seek out opportunities to meet the rising expectations of their residents for both higher services and lower property tax rates. One way cities can achieve cost savings is to cooperate with other cities in the delivery of goods and services. Such efforts often can improve the quality of the services being provided and reduce costs by taking advantage of economies of scale and reducing spill-over effects. Cities are thus simultaneously compelled to compete and cooperate with each other. How they go about the process of making partners of the cities with which they regularly compete is the subject of this book. The author focuses his analysis on how cities choose their cooperation partner. Using Census data on local government finances, the book explores patterns of cooperative behavior regularly utilized by cities, and suggests a model of cooperation choice not previously discussed in the literature.