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Transaction cost approach explains that the government’s external service production mechanism is determined by two characteristics of goods and services: asset specificity and measurability. Previous studies have treated each transaction cost characteristic as distinctive determining factors for dependency and defection risks, which eventually aff...
Contexts in source publication
Context 1
... we may derive the following hypothetical propositions: at a low level of transaction risk, government may prefer market options; at a very high level of transaction risk, government would much prefer an internal production mechanism; at a moderate level of transaction risk, government would prefer to contract with other local governments and non-profits. Figure 1 depicts this hypothetical illustration. ...
Context 3
... Figure 1, we may say that interlocal government cooperation for public goods supply would have an inverted U-shaped relationship with the level of transaction cost characteristics (Shrestha & Feiock, 2010). The figure also parallels Williamson's (1991) argument that a rise of asset specificity will lead a governance mechanism from market to internal production via hybrid forms. ...
Context 4
... greater the asset specificity, the more customized the contract and the contracting relationships. Previous research found that asset specificity has an inverted U-shaped association with the likelihood of interlocal cooperation for public service delivery (Shrestha & Feiock, 2010;Brown and Potoski, 2007) as depicted in Figure 1 in the previous session. ...
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Citations
... The latter view is supported by the literature drawing on the transaction cost perspective (Andersen & Pierre, 2010;Carr et al., 2009;Hawkins, 2010;Ki and Park, 2019;Rodrigues et al., 2012;Rubado, 2021;Terman et al., 2020) that local governments' choice of either collaborative mechanism is a function of the level of intergovernmental competition and collaboration risks (Terman et al. 2020;Yi et al. 2018). Addressing the gap between those two views (i.e., substituting vs. complementing roles of both mechanisms) promises to bring new insight into the risk hypotheses (Berardo & Scholz 2010) for intergovernmental collaborations and will provide advice for practitioners as to how to manage regional intergovernmental networks. ...
Informal and formal collaborative mechanisms are distinctive self-governing strategies that local governments use to mitigate intergovernmental collaboration risks. Studies on local governance have long argued that both mechanisms tend to co-occur and appear mutually complementary. However, extant research drawing on the transaction cost perspective provides a more nuanced and different explanation that as intergovernmental competition increases, local governments lean toward the choice of a formal mechanism over an informal mechanism to effectively address higher collaboration risks. Through a network lens, this study empirically tests the latter view. Using the Orlando metropolitan area as a testbed, Multiple Regression Quadratic Assignment Procedure tests reveal that the use of both collaborative mechanisms is positively associated with the level of intergovernmental competition. However, different from the initial expectation, local governments are more likely to engage in the informal mechanism rather than the formal mechanism as the competition level increases. In doing so, this study developed a new measurement strategy for intergovernmental competition to test the dyadic network-related research hypotheses. The measurement strategy and the research findings should inform future research on intergovernmental relations and local government network management.
Interorganizational collaboration is a means, through which governments to effectively respond to disasters. However, the extent to which collaboration risks embedded in interorganizational relationships shape such collaborative arrangements largely remains unanswered. This study examined the impact of collaboration risks as perceived by organizational representatives with regard to emergency management (EM). To this end, we conducted an EM survey in Seoul in 2015 and analyzed the data using a quadratic assignment procedure logistic regression. The dyadic network analytic results demonstrated that the aggregate risks as perceived by paired organizations are negatively associated with the establishment of collaboration ties. In contrast, a significant disparity in the perceived risk levels between paired organizations promotes collaborative network arrangements; when one party perceives substantially lower collaboration risks relative to the other, it can create a favorable condition for both parties to initiate interorganizational collaboration. K E Y W O R D S collaboration risk, emergency management, interorganizational collaboration, risk perception disparity
