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Explaining Horizontal and Vertical Cooperation on Public Services in Michigan: The Role of Local Fiscal Capacity

Jered B. Carr, Wayne State University
Elisabeth R. Gerber, University of Michigan
Eric W. Lupher, Citizens Research Council of Michigan


Chapter in Metropolitan Affairs in Michigan, Michigan State University Press, Forthcoming, 2008


Michigan local governments engage in a wide range of cooperative activities. Little is known, however, about what factors motivate local governments to engage in intergovernmental cooperation and how local government officials choose among various forms of collaboration. We develop and test a theory of intergovernmental cooperation that explains differences in the factors that lead local governments to engage in horizontal cooperation with other local units versus vertical cooperation with county or state governments. Our primary focus is on fiscal capacity: we hypothesize that limited fiscal capacity leads many local governments, especially townships, to work collaboratively with state or county actors to provide government services. Local governments with greater fiscal capacity, especially cities, are stronger potential partners and so are more likely to collaborate with other local governments using horizontal arrangements. We expect other factors, such as population characteristics, local and regional economic factors, federal or state mandates, and the existence of collaborative partners, to matter as well. We test these hypotheses with survey data collected in 2005 by the Citizens Research Council of Michigan on the mode of service provision employed by 460 Michigan local governments across 115 service categories. We find strong support for our propositions about the linkage between local fiscal capacity and intergovernmental cooperation on public services.