Role and significance of political incentives: understanding institutional collective action in local inter-governmental arrangements in China

Forms, opportunities and challenges of institutional collective action (ICA) have become important issues in local government and governance. Studies have focused on the self-organising mechanisms of an ICA framework by seeking to make sense of inter-local collaborative behaviour through the lens of transaction costs. Such studies need to be complemented by country and comparative perspectives which, in particular, test the applicability of the framework to various contexts embodying differing incentive structures for local governments. Accordingly, the present study considers the role and significance of political incentives in addressing ICA issues as manifest in cases of local inter-governmental arrangements in the Pearl River Delta in China. It shows that the type of political incentive (rank-ordered or non-rank-ordered) attached to a specific policy area strongly affects the collaborative behaviour of local governments when coping with ICA dilemmas. This suggests that political incentives play a significant role in influencing the collaborative behaviour of local governments.