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The Economics Of Horizontal Government Cooperation (Working Paper), Matthew R. Dalsanto Ph.D.

Matthew R. DalSanto, Ph.D.

This paper analyzes the ability of intrastate and interstate cooperative agreements to either minimize or capitalize on interjurisdictional externalities. These agreements are commonly referred to as compacts or joint powers agreements (intrastate compacts). The compact mechanism allows regional governments to enter into contractual agreements with one another to coordinate policy choices and to engage in cooperative endeavors. Given the inter-jurisdictional nature of the issues that affect horizontally situated governments, this mechanism is a powerful tool to achieve welfare-enhancing outcomes for citizens.

A review of the legal case law surrounding compacts is conducted to analyze the legal properties from an economic …