A Transaction Cost Approach to Policy-Mandated Collaborations: Evidence from North Carolina

Abstract

In human services domains, policymakers mandate formal collaborations and alliances between public service agencies as part of policy implementation. We examine mandated child welfare collaborations in a stratified random sample of North Carolina counties, finding that agencies experienced frictions associated with collaboration fatigue and unclear goals. Access to private information, the ability to combine collaborations, and even serving lunch were conduits for successful collaboration. Agencies that did not engage faced high costs and saw little marginal benefit. We argue that policymakers looking to improve collaboration should communicate the value propositions to the agencies involved. They should also fund lunch.