Economic Development Networks Among Local Governments

Since the local governmental system has been fragmented, competition among local jurisdictions to retain existing business and attract companies located in other cities has increased. In the competitive environment, on the other hand, local actors attempt to collaborate with others in order to efficiently secure scarce resources and to maximize their own interests through collaboration. While previous research has normatively discussed collaboration or focused on the factors influencing policy networks among local jurisdictions, there have been few studies empirically investigating policy actors’ behavior in the collaborative network sphere. This study tested network hypotheses regarding coordination and cooperation depending on the risk preference of local governments: how institutional actors make strategic decisions depending on the situation that they face, in order to resolve collective action problems. This study found that while local governments coordinate with other governments for simple information exchange, they are likely to commit to partnerships through creating tightly-clustered network structures to reduce uncertainty and risk of defection in contracts. In this study of the Tampa Bay metropolitan area, in particular, cooperative network structures are more likely than coordinating network structures to occur in the economic development policy arena. In addition, this study found that local jurisdictions are more likely to collaborate with those that belong to the same county.