Abstract
Economic development at the local level presents an intrinsic tension produced by competitive and cooperative dynamics. While empirical studies have identified drivers for collaboration at the local level, less is known about the scope of activities promoted by state-level agencies and the institutional mechanisms that state and local actors create to cooperate. This study exploits a unique data set created by the State of Iowa reporting the economic development agreements from 2007 to 2018. The findings illustrate how workforce development activities are the most prevalent activity while fiscal incentives are the least recurrent practice. In terms of institutional mechanisms, service contracts are used most frequently. Additionally, a state agency and nonprofit organization dyad is the most common collaboration, which highlights the role of state governments in shaping local economic development strategies. This exploration of mechanisms, activities, motivations, and duration contributes by improving theories of formal collaboration and intersectoral governance.
Confronted by increasing demands for workforce development, marketing, and job creation, local governments approach economic development as a complex policy domain where the contrasting dynamics of competition and cooperation shape both individual and collective strategies implemented by multiple jurisdictions in a region (Frederickson, 1999; Park & Feiock, 2012). Empirical studies have shed light on how local government officials think of economic activities as zero-sum games of development policies, where the benefits of one jurisdiction come at the expense of another (Gordon, 2007; Peterson, 1981). Researchers have placed significant focus on the factors that drive or deter cooperation in terms of regional economic development, such as the potential partners’ perceptions of risk, the geographical and demographic similarities of municipalities, and social capital like trust and reputation (Carr et al., 2017; Gordon, 2007; Lee, 2016; Lee & Lee, 2022).
Notwithstanding, several critical elements remain unveiled to a level of detail that can be useful for theory development focused on formal collaboration. Some of these elements are related to the patterns of partner selection and the role of state agencies and counties in these cooperative dynamics (Park & Feiock, 2012). Others pertain to the institutional mechanisms that local actors design and operate to implement joint economic development strategies. Moreover, one of the most salient gaps in the extant literature is related to the concrete activities that state-level agencies and local units execute to promote economic development in a cooperative fashion. A few studies have addressed this question and identified recurrent marketing and workforce development activities (Olberding, 2002), but a more systematic and closer look at these activities is still missing.
While collaborative arrangements can be powerful solutions to transjurisdictional issues, some of their strengths make their study challenging (Kim et al., 2022). The flexible, intermittent, and contingent nature of collaboration has limited the study of economic development collaboration to reporting networks through the identification of general ties without a clear understanding of the activities undertaken or the nature of the linkages created by the collaborative agreements or institutions. Additionally, the limitations of collecting collaborative data through surveys, cross-sectional data sets, and single-county studies have limited a closer look into economic development intergovernmental and intersectoral relations (Li et al., 2021).
Our exploratory analysis overcomes these limitations using a unique longitudinal data set of collaborative agreements enacted from 2007 to 2018 in one of the most critical domains for local governments: economic development. The Iowa statute requires every agreement between local governments and state-level agencies, special districts, and nonprofit and private organizations to be filed with the Iowa Office of the Secretary of State prior to enforcement (Iowa Code, Chapter 28E, 2018). This reporting requirement has permitted the creation of an unparalleled data set that is comprehensive in the scope of activities covered and rich in detail about the collaborations created. The data have been archived since 1993 and are updated every year with new agreements and terminations of existing ones. No other state has created similar repositories containing most of intergovernmental and intersectoral relations with this level of comprehensiveness, making this data set capable of overcoming limitations of previous research based on cross-sectional survey data.
Using archival data, we shift the focus of our questions from what elements hinder or enhance collaboration to (1) What are the concrete activities in which they work jointly? (2) What institutional mechanisms do local actors create to collaborate? and (3) Who are the most common dyads of collaborators for economic development activities? The descriptive analysis sheds light on these questions while proposing an innovative qualitative approach to the study of intergovernmental relations. A qualitative coding strategy was designed to identify keywords related to institutional forms, duration, activities, shared governance, and motivations in the agreements signed by local governments and submitted in a virtual repository. This exploration suggests that, within economic development as a service category, state-level agencies predominantly use short-duration service contracts to engage in workforce development activities. This might be explained by the budgetary cycles under which state-level agencies operate, but it can also unveil the need for a relatively flexible institutional design that allows partners to terminate when the agreement expires.
An Elusive Phenomenon of Study
The flexible nature of intergovernmental and intersectoral relations makes them difficult to trace and analyze. Empirical research generally relies on collecting data through surveys of local public officers. Respondents are required to recall their most frequent collaborators or asked to select their frequent collaborators from rosters (Lee et al., 2012; Shrestha, 2012). This data collection method captures collaboration in a binary way: adjacency matrices usually show a “1” when a dyad of two actors has collaborated and a “0” when none of the actors of said dyad stated that they had collaborated in the past. Although some questions in these surveys can register the frequency of collaboration (Hawkins et al., 2016), this collection method generally does not allow researchers to have a closer look at the actual institutional mechanisms that the respondents use when collaborating. This study overcomes such limitations by using a longitudinal data set of interlocal agreements that captures not only the partners involved but also the duration of the agreement and its purpose across time.
Data: The Iowa 28E Data Set
Chapter 28E of the Iowa code empowers state and local governments to jointly provide services through agreements with governmental and nongovernmental agencies for the accomplishment of mutual interests. The Iowa statute requires that the agreements be filed with the Iowa Office of the Secretary of State before enforcement (Iowa Code, Chapter 28E, 2018). Chapter 28E defines public agencies as any political subdivision in Iowa, any agency of the state or federal government, political subdivisions of another state, and any federally recognized Indian tribe. The digital repository of agreements is publicly available (https://sos.iowa.gov/) and displays information regarding partners, purpose, duration, contractual obligations, financial arrangements, and activities covered by each agreement.
A custom web-scraping script was developed to download the publicly available agreements filed from 1993 to 2018. Public officials register the metadata of the agreements in over 30 service categories and the image of the signed agreements. The data set contains the following information: participant (city, county, special district, state agency, federal agency, private, or nonprofit organization); duration of the agreement; contractual obligations; financial arrangements; and administrative responsibilities. For instance, agreement M503761 between Iowa Workforce Development and the Des Moines Area Community College involved hiring an executive director for the Des Moines Workforce Development Center. The agreement was filed in 2010 and had a duration of 1 year with a clause that allowed the parties to renew it.
Our study is based on a subset limited to agreements filed from 2007 to 2018 in the service category of economic development. The concentrated data set comprises a total of 120 agreements, after discarding five observations that corresponded to amendments of original agreements filed before 1993 and, therefore, are not hosted in the digital repository. This subset was coded following the qualitative strategy proposed by Li et al. (2021) in which institutional forms were identified based on the text of the agreements registered. Two independent coders analyzed the 120 agreements in the subset and discussed the discrepancies in their coding. After a pilot phase, and two cross-checking phases of coding, the team reached a consensus on the coding for all 120 agreements in May 2020. This two-coder individual coding and cross-check session resulted in an overall inter-rater reliability score of 90% in the first stage and 99% thereafter. Any inconsistencies in coding were handled by group consensus.
Each agreement on the data set was reviewed to compile information on six variables: participants, duration of the agreement, stated objective, institutional form, funding, and shared governance mechanisms. The number of participants and duration of agreements were data already available from the metadata at the digital online repository. Although comprehensive, the data set has limitations in terms of the collaborative activities captured. Even though the Iowa Code mandates that every agreement must be filed before enforcement, informal or “handshake” arrangements are not captured in this data set. Nor does it capture more specific activities, such as small business development or technology-led economic development.
Qualitative Coding and Analysis
Areas of Activity: the Salience of Workforce Development
The frequency of collaborations in economic development in Iowa varies by area of activity. Following the International Economic Development Council (2022) and empirical research on economic development and collaboration (Lee et al., 2012; Lee & Lee, 2022), we categorize the agreements analyzed into eight areas of activity: (1) Building code, zoning, and land use planning; (2) economic development marketing; (3) general economic development; (4) business incentives; (5) place-based incentives or infrastructure; (6) neighborhood development/quality of life; (7) real estate development; and (8) workforce development. One example of category 1 is agreement M503156, which sets the building code and zoning authority for one property between two cities. Category 2 often involves economic development organizations aimed to promote the city or region, most notably convention and visitors’ bureaus. For instance, under agreement M510327, a city government provides funding to the local convention and visitors bureau through hotel taxes. For category 3, typical examples are the creation and operation of general-purpose economic development organizations, commissions, or cooperatives, such as the Southwest Economic Development Cooperative in agreement M505067. Given that using incentives is a pervasive practice based on the existent empirical research (Bartik, 2019; Zheng & Warner, 2010), categories 4 and 5 are for business-based incentives and place-based incentives or infrastructure. The former is related to loan programs that are not limited to a specific geographic area (e.g., agreement M505170 allows cooperation to manage a city's loans to local firms), while the latter corresponds to incentives that entail specific geographic spaces such as tax incremental financing (TIF) districts, urban renewal areas, and enterprise zones (e.g., agreement M500434 is a TIF agreement between a county and a city). Category 6 relates to community services such as utility, fire, mental health, and schools. For instance, M503142 is an agreement between a city and a developer over utility extension. Category 7 accounts for direct participation in real estate projects by governments through land or capital contribution, which entails partial government ownership. For instance, based on agreement M508634, a developer is permitted to build on city-owned land and the city would take a share of the sales value later. Finally, category 8 is about workforce development, typically represented by state funding of community colleges (such as agreement M503761 mentioned earlier). One agreement was coded as NA as it involved an agreement that was mistakenly registered as economic development but involved the purchase of a health insurance plan for public officials. Given this qualitative coding protocol, we identified the institutional mechanism used by local governments to engage in collaborative dynamics as well as the concrete activities that the local partners agreed to execute when signing the agreements.
Table 1 shows the distribution of agreements by activity for the total 120 agreements. Workforce development represents the most common area of activity in formalized economic development collaborations in Iowa, accounting for 57.5% (69/120) of all agreements between 2007 and 2018. These agreements typically last for 1 year or less and are often extended for 1-year periods. The second most frequent collaborative activity is economic development marketing, accounting for 11.7% (14/120), followed by the category that includes building code, zoning, and land use at 7.5% (7/120). Among the rest of the categories, only agreements related to general economic development and real estate development account for above 5% of the total, with seven agreements in each category.
Agreements by Areas of Activity.
Institutional Form: The Pervasiveness of Service Contracts
Our coding of institutional form followed Morse and Abernathy's (2015) categorization of institutional forms for shared service agreements, as shown in Figure 1. The institutional forms are situated on a consolidation continuum, from the least to the most integrated. We followed an adaptation of this categorization as proposed by Li et al. (2021) that divides the transfer of Functions into two separate categories: Transfer of Responsibility and Transfer of Authority. Our framework assumes that, in contrast to the permanence of transfer of responsibility, transfer of authority involves only the transference of the provision of a service, not a transfer of the responsibility for its provision. Thus, when authority is transferred, one participant provides a service that formally remains the responsibility of another participant.
Range of Institutional Forms used to support collaborations on Local Public Services.
As can be seen in Table 2, the agreements examined more-often-used service contracts as single-party production institutional mechanisms. This category accounts for 70% of the total (84/120) number of agreements. The most frequent type of contract involves the state workforce development agency and private organizations or nonprofits (most frequently chambers of commerce). Agreements that use service contracts generally refer to activities like economic development marketing, real estate development, and neighborhood development. The second most common institutional mechanism is joint operations, accounting for 11% of the total (13/120). The most common dyad for joint operations is a city and a nonprofit organization, and the activities involved in these joint production agreements involve general economic development. Although the second most frequent institutional form is joint operations, the fact that more than two-thirds of the signed agreements correspond to service contracts sheds light on how different levels of government understand collaboration as single-party production arrangements.
Institutional Form Chosen by Categories of Actors.
In terms of the type of actors involved in these economic development agreements, cross-sector collaboration is the most recurrent arrangement—the state workforce development agency being the most central actor—signing agreements involving mostly service contracts with nonprofit organizations (36% [43 out of 120 agreements]) and private organizations with 15% (18/120). Within the category of collaboration involving only public actors, the most salient dyad corresponds to city-county agreements, accounting for eight agreements, approximately 7% of the total. Every other combination of public actors in horizontal or vertical arrangements accounts for less than 1% of the total, except for agreements involving two counties, which account for 2.5% of the total.
Table 3 combines the two classifications shown before by listing the activities in the agreements according to the institutional form used. Service contracts were used in 69 agreements for workforce development activities, whereas seven joint operations and five service contracts were signed to perform economic development marketing activities. The rest of the agreements are distributed among the other categories of activities, accounting for less than 1% of the total agreements analyzed.
Activities by Institutional Form.
Stated Objectives: Aiming for Greater Access to Services
The agreements in the data set generally include a section named “Purpose,” in which general statements of the power to collaborate conferred by Chapter 28E are listed, as well as brief and broad descriptions of the goal that the agreement attempts to achieve. The coding protocol examined the stated objectives of the agreements rather than the general purpose explained before. The coding protocol considered the identification of specific objectives included in the terms of the agreement related to three different motivations for collaboration: (a) Efficiency, (b) effectiveness, and (c) accessibility to the service. Each objective is operationalized in the data set as a dichotomous variable in a nonexclusive fashion. That is, the presence of one, two, all, or none of the objectives in an agreement is possible.
A list of keywords was created based on the conceptualization of efficiency, effectiveness, and access described in previous empirical research (Aldag & Warner, 2018; Carr, 2004; Hendriks, 2014). The coders searched for efficiency in the agreements by looking for terms related to cost savings and scale economies. These keywords include “cost reduction,” “cost saving(s),” “efficient(ly),” “efficiency,” “lower expense,” and “economies of scale.” Agreements whose objective is effectiveness include direct cues related to the improvement of service level. These words include “effective(ness),” “better (quality),” and “improve(ment)” (in quality or service delivery).
Expanding access to public services was not coded by searching for specific keywords. The coding protocol established two conditions signaling that the agreement enables access to public service or physical infrastructure. First, the service is provided directly to the community identified as the receiver through the agreement. Second, the service was unavailable in the receiving jurisdiction before the agreement entered into action.
As can be seen in Table 4, approximately 70% of the agreements (85/120) do not include keywords related to any of the three objectives. Enabling access to a service is the most frequent category for objective, but both efficiency and effectiveness are close in numbers to the most recurrent category. Table 5 shows the distribution of stated objectives by institutional form. Agreements using joint operations are the ones showing a higher frequency of stated objectives in all three categories. Service contracts also show a similar number of agreements in each of the three categories for objectives.
Efficiency, Effectiveness, and Access.
*Note: Numbers and percentages do not total 100% (120), as agreements can include one, two, or all three terms related to their objective
Objectives Identified by Institutional Form.
Funding
The agreements were analyzed in terms of the presence of information related to how the activities performed in the agreement will be funded, or any other information about fees for service or payment schedules. The dichotomous variable has two possible options: “1” if there is any information related to financial exchange, funding, or payment for services; “0” otherwise. Table 6 shows that 87.5% of the agreements include information related to funding, scheduled payments, or fees for service. This finding relates to the fact that the largest percentage of agreements corresponds to service contracts in which the terms and fees for services are clearly specified.
Funding of Agreements.
Shared Governance
The dichotomous variable of shared governance is “1” if the agreement includes any information related to collective decision-making processes or mechanisms where all participants are included in decisions related to the provision of the service, new participants in the agreement, funding, and performance monitoring. Table 7 shows the frequency in which shared governance mechanisms were identified in the agreements. These shared governance mechanisms are common in agreements using joint operations and new joint entities. However, some service contracts also include information regarding decision-making processes, oversight, and approval of services.
Shared Governance.
Duration
The metadata corresponding to each agreement hosted at the Iowa 28E repository includes information related to the duration of the agreement. Notwithstanding, several agreements stipulate the conditions that allow partners to renew, amend, or terminate an agreement. Collaborative agreements in this economic development subset can last less than a year or be filed as agreements of indefinite duration. As can be seen in Table 8, almost half of the agreements were filed with a duration of 1 year, and approximately one-fifth of them have indefinite duration. The data include both new agreements registered in the repository as well as renewals of existing agreements that reached the expiration date.
Duration of Agreements.
Discussion
The qualitative exploration of the total agreements in a 12-year-period allows us to zoom into the collaborative dynamics of economic development—a highly critical domain for local governments. The level of detail in the data allows a qualitative coding strategy capable of unveiling important elements of partner, activity, and institutional form selection. Moreover, this exploration depicts a network in which the state-level agency is one of the most central actors that creates ties with nonprofit organizations—ties that are generally renewed every year. These findings contribute to the understanding of the importance of state-level governments in a policy domain characterized by competition among cities and other local governments.
One of the most salient findings is that most of these collaborations are pursued as service contracts. It is the most frequent institutional form used by local governments to perform workforce development activities. On the one hand, this finding sheds light on the way in which state-level workforce development agencies channel resources for specific activities to local actors. The agreements we analyzed show arrangements in which state-level agencies hire services from private and nonprofit organizations, instead of partnering with city or county governments. On the other hand, they raise the question of the extent to which outsourcing practices can be labeled collaborative arrangements. Although service contracts can indeed expand the access to services, increase quality levels, or save costs, the single-party nature of these arrangements in which one actor produces a service whereas the other passively receives and pays a fee for said service raises the question of whether these activities are collaborations. In terms of this study, although service contracts are the least integrated form of cross-boundary cooperation, they imply an external production of services and interdependent relations at the local level. The specific finding that state governments use these single-party production contracts and renew them every year contributes to the understanding of the pace and form in which resources for economic development land at the local level.
In terms of the activities identified in these agreements, this exploration allows practitioners to identify institutional mechanisms that could lead to more efficient arrangements for specific economic development practices. While joint operations might be regarded as an institutional form in which both parties invest resources to achieve specific goals, service contracts in distinct areas might provide the pragmatic and flexible means for one party to produce services and another party to buy services more efficiently than they could produce them in-house. Workforce development activities, considered more alternative strategies of economic development, are far more prevalent than traditional strategies like business or place-based incentive activities in the agreements we studied. This finding can highlight one of the limitations of the data set. Fiscal incentives or place-based incentives are known to be one of the most recurrent economic development practices at the local level. Their low frequency in this data set could imply that these placed-based tools are generally not registered as intergovernmental relations in the repository of Iowa's Secretary of State. A different explanation can result from the nature of the data set: a considerable number of local governments in this data set are small jurisdictions in terms of population. For local governments whose resources might be more limited than those of larger jurisdictions, maintaining service levels might be a more feasible goal than investing resources in incentives to attract businesses.
Future research can also explore questions related to the scope of the term “collaboration,” as it can be argued that outsourcing dynamics is not the prime example of collaborative arrangements at the local level. Notwithstanding, service contracts are the most pervasive form of cross-boundary cooperation among local units.
Our longitudinal exploration overcomes certain limitations inherent to cross-sectional studies that study cross-boundary cooperation during a specific point in time and provides certain elements to questions related to the evolution of these dynamics in economic development. The most frequent institutional form and duration of agreements did not change substantially over time. Service contracts with a duration of 1 year are the most prevalent type of agreement in the period studied. In terms of activities, agreements signed between 2007 and 2010 entailed diverse activities, such as building codes, zoning and land use, neighborhood development, general economic development, workforce development, and infrastructure. Between the second half of 2010 and 2013, workforce development became the most prevalent activity. After this period, workforce development agreements remain present but other activities can also be identified in the agreements, such as business incentives, infrastructure, and economic development marketing. This latter category has an interesting growth, accounting for only three agreements during the first half of the period studied and increasing considerably in terms of number of agreements during the last years (2014–2018).
Finally, the finding referring to the state workforce development agency and private or nonprofit organizations being the most frequent dyad in these agreements highlights one of the ideas most closely related to economic development at the local level. Local governments work under fiscal stress and increasing demands for public services. Given this pressure, cities compete to attract businesses as a means to increase their revenue, and in response to their constituencies’ expectations of job opportunities (Lee & Lee, 2022). In such a competitive environment, it makes sense that this data set captured considerably few agreements involving only cities or counties.
Future research can build on this qualitative exploration to create a better understanding of the role of state-level agencies in promoting economic development in metropolitan regions. Moreover, knowing the most frequently used institutional forms and the activities involved in economic development agreements, future studies could analyze the performance of these institutional mechanisms in terms of cost savings or service levels.
Footnotes
Declaration of Conflicting Interests
The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The authors received no financial support for the research, authorship, and/or publication of this article.
