Coping with functional collective action dilemma: functional fragmentation and administrative integration

ABSTRACT

Functional fragmentation among city departments has been a critical public administration problem in practice and theory. This paper investigates the political and administrative motivations for the reform from functionally fragmented water governance model towards an integrative agency design. Drawing on the Institutional Collective Action (ICA) framework and the literature on bureaucratic structures, we hypothesize that cities’ decisions for administrative reform are influenced by different types of transactions costs incurred in the negotiation process among local agencies. Empirical results of this study provide strong support for the transaction cost hypotheses on the roles of bargaining cost, enforcement cost, and information cost.