Intermunicipal cooperation and agreement formalization

We explore the effects of agreement formalization and partners on cooperation costs in twelve local government services in New York State. Our survey differentiates agreement formalization (informal, memorandum of understanding, joint production, contracting and special districts) and controls for cooperation duration and non-profit partners. Cost data (1996–2016) enable panel models which find agreement formality often has no effect on costs. Non-profit partners typically reduce costs. Formality is associated with higher costs in services where quality improvements are sought, and lower costs where formality shifts budget authority. In general the costs of formality appear to be balanced by savings over time.