What’s in it for the big ones?
How city and suburban municipalities vary in their motivation to collaborate
Sara Blåka (University of Agder), Erik Magnussen (Telemarksforsking), Dag Ingvar Jacobsen (University of Agder), Einar Leknes (NORCE Norwegian Research Centre), Bent Aslak Brandtzæg (Telemarksforsking)
In urban governance, collaboration between municipalities is a common strategy to produce and provide services. However, the motivations behind such collaborations can vary significantly between city and suburban municipalities. Our recent study explores these differing motivations and explains why larger municipalities engage in intermunicipal cooperation (IMC) despite having the resources to operate independently.
The core argument for shared service delivery is simple: larger scale production lowers unit costs, leading to reduced spending or higher quality. Over the past two decades, much research has examined whether service delivery through intermunicipal collaboration achieves quality improvements and cost reductions. The rationale then is that if the benefits of cooperation exceed the costs, cooperative arrangements will be chosen. In this sense, municipalities engage in collaborative efforts based on cost-benefit calculations concerning the service at hand.
The argument of increasing scale to extract service-related benefits is convincing for small municipalities. Studies indicate that the smallest municipalities face the greatest challenges in obtaining economies of scale and therefore benefit most from collaboration. It is easy to understand why small municipalities engage in collaborative efforts and seek collaboration with larger ones to reap benefits from their resources.
However, empirical studies show that large municipalities engage in as many, often more, intermunicipal cooperations than smaller ones. This raises a puzzle: if large municipalities can realize economies of scale on their own why do they engage in collaborative efforts with smaller ones?
To explain large municipalities’ motivation to share services with neighbors we therefore suggest looking beyond service-level performance. In addition to efficiency as driver for cooperation we propose two main motivations, derived from insights from two central streams in organization theory. The first is inspired by resource dependence theory, and views entering a cooperative arrangement as a strategic choice, to gain access to important external resources that even large municipalities do not control. The second is grounded in neo-institutionalist theories stressing that entering a cooperative arrangement can be based on motives to increase legitimacy.
We explore reasons for why large and small municipalities engage in shared service delivery by analyzing interview data from six Norwegian center-city municipalities and their surrounding municipalities.
Figure 1. Map over Norway, displaying the Functional Urban Area in each case region. Consists of the city and its commuting zone. Source: Statistics Norway
Results indicate that city and suburban municipalities collaborate for different reasons. While surrounding municipalities cooperate to increase operational size, center-city municipalities are motivated by spatial needs, regional influence, and institutional pressures. These findings suggest that inter-organizational relationships should be considered a mixed-motive situation where goals and motivations vary between member organizations.
Our research reveals that while smaller municipalities primarily seek collaboration to achieve economies of scale and improve service quality, larger municipalities are driven by strategic and legitimacy-related motives. Smaller municipalities often lack the resources to deliver high-quality services independently. By collaborating with larger municipalities, they can pool resources, reduce costs, and enhance service quality. Larger municipalities, on the other hand, do not expect efficiency gains from collaboration. On the contrary, they often face increased transaction costs and coordination challenges when engaging in IMC.
For larger municipalities, the driver for collaboration is partly a result of adapting to institutional pressure in the sense of comprising to expectations to aid smaller neighbors in need of joining larger service production units, and partly a strategic choice aimed at strengthening their regional influence and securing resources from higher levels of government. By presenting a united front with neighboring municipalities, they can attract state investments and enhance their regional competitiveness.
For small municipalities, quality and costs are thus the most important motives, while this is not a driver for larger municipalities. For the large municipalities, shared service delivery is rather a mean for securing regional leadership to comply with external institutional pressure, and for this they may even be willing to accept higher costs associated with service production and provision than they could have achieved by providing the services alone. Metropolitan municipalities thus engage in shared service delivery to reach goals that lie outside the actual service.
Understanding these motivations is crucial for policymakers and municipal leaders. Recognizing that larger municipalities may engage in IMC for reasons beyond immediate service delivery can help in designing more sustainable collaborative arrangements. Managers of collaborative arrangements should be aware the possibility that actors participate based on very different motives and perspectives. Used in a constructive way, this should be presented as a positive element, something that provides the collaboration with a broader basis than just improving quality or reducing costs. Furthermore, managers can use the insights connected to different motives to strengthen the perception of interdependence between the actors, which may have a positive effect on commitment to the collaboration.
Sara Blåka is currently an associate professor in political science and management at University of Agder (Kristiansand, Norway). Her former publications include studies of intergovernmental relations, democracy and public service performance.
Erik Magnussen is a political scientist and former researcher at Telemark Research Institute, where he studied democracy, governance and organization in local government.
Dag Ingvar Jacobsen is a professor of political science and management at University of Agder (Kristiansand, Norway). He has worked on relations between politics and administration, intergovernmental cooperation, and leadership in public organizations. His most recent publications have appeared in Local Government Studies, International Review of Administrative Sciences, and Public Administration Review.
Einar Leknes is currently Chief Scientist at NORCE, Norwegian Research Centre. He is Dr.ing in urban and regional planning. Former publications covers topics like environmental impact assessment, land-use planning, public decision-making, transport and spatial policy.
Bent Aslak Brandtzæg is a Senior Researcher at Telemark Research Institute, Norway. His research focuses on municipal and regional development, with a particular emphasis on municipal service provision, community development, local democracy, inter-municipal cooperation and municipal structure.