Association for Public Policy Analysis & Management

The pursuit of environmental sustainability faces well-known challenges, particularly when it occurs in the context of small fragmented jurisdictions that necessitate collective action. Resource scarcity has been identified as an important factor influencing organizations’ decisions to forge collaborative relationships that facilitate collective action. Embedded in networks of resource interdependencies – where one organization’s survival is partially dependent on another’s resources – many agencies view collaboration as a necessary strategy to persist in an uncertain and competitive environment. Although extant research has revealed a causal link between resource availability and the emergence of collaborative networks, few studies have examined the role that agency autonomy over resource expenditure has on the success of collaborative efforts. This research begins to fill this gap by examining the relationship between intergovernmental transfers and agency autonomy in the context of local energy and sustainability initiatives.

Federal grants are an important stabilizing force for cities and help them meet ever-increasing public demands for quality government services; to the extent that some scholars describe federalism as “the most enduring model of collaborative problem resolution.” Nonetheless, because federal subsidies often come with spending requirements that limit autonomy, federalism is often criticized for hindering collaboration at state and local levels. The use of restrictive mandates reflects prevailing rational choice assumptions about the opportunistic behaviors of agencies in the provision of important public services. By contrast, the economic theory of fiscal federalism posits that funding flexibility allows sub-national governments to experiment with various ways of customizing service provision using local expertise, ultimately leading to positive policy outcomes. Governments with greater fiscal discretion are also expected to collaborate more, given that many policy innovations to tackle today’s complex problems require the involvement of multiple agencies. Significant empirical evidence has been found supporting these theoretical expectations in social policy arenas including welfare, education, and public health.

This paper considers a new policy area – local sustainability – to examine how flexibility in federal funding influences inter-local and inter-agency collaboration. It looks specifically at the Energy Efficiency and Conservation Block Grant (EECBG) program and examines its impact on cities’ use of collaborative approaches to overcome institutional collective action dilemmas. Previous studies have offered conflicting conclusions about the relationship between constraints associated with EECBG funding and the likelihood that recipients engage in collaboration. The contradictory findings may be due to administrative delays in implementing EECBG projects, suggesting that empirical analysis should use data collected over a longer period of time to capture the evolution of cities’ collaborative relationships since their initial receipt of the funds. This research employs survey data collected from US cities in 2011 and 2015/2016 to examine how differences in the degree flexibility that cities experienced with EECBG funds influence their likelihood of engaging in collaborative partnerships to promote sustainability. Looking over time and taking into account variations in administration delays affords both a more accurate picture of cities’ networking trends, as prompted by EECBG, and reveals the extent to which it has a lasting impact on collaboration for sustainability.