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Economic Growth And Local Governments

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In pursuit of economic growth, local governments in American often encounter the institutional collective action dilemma due to fragmentation of authorities in governance systems and fierce competitions in the context of economic development. City governments have to cooperate with either their neighbor cities or other cities to encourage economic growth. This is because individual city government might be too smaller to reach economies of scale, so that companies might be reluctant to make the investment unless the size of operation could grow to a certain point. And also, some factors of production, such as water or electricity, might not be solely controlled by one city government; pollution problems caused in the process of manufacturing products might not be confronted by only one city government as well. In spite of potential benefits for collective actions, as many studies have indicated, coordination and defection cost would put intergovernmental collaboration at risk(Carr & Hawkins, 2013). Lack of central authority coordinate with local governments, conflicting goals is rarely to make them enter into mutual agreements. Even as they recognized accepted goals for joint actions, diverse means might be devised by each of them(Feiock, 2013). As city governments compete with each other to provide favorable development policies, their fiscal pressures build up and the probability of policy failure increases(Minkoff, 2013). Under this situation, individual actions taken by

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