Rational Choice and Regional Governance

ABSTRACT:

This article presents a “second-generation” rational choice explanation for voluntary regional governance. It identifies the interests that motivate interlocal collaboration and argues that voluntary agreements emerge from a dynamic political contracting process in which benefits exceed the transaction costs of bargaining an agreement. Explanations are presented for how specific community characteristics and formal and informal institutional arrangements reduce transaction costs of information/coordination, negotiation, enforcement, and agency. Based on the logic of this framework, sets of propositions are presented regarding how these contextual factors influence the transaction costs of cooperative actions. Evidence supporting these propositions is reviewed, followed by a discussion of implications of this second-generation rational choice theory for the study and practice of regional governance.