Governance of a Public Sector Joint Venture: The Control Challenges of Dominated Owners

Abstract

Local governments increasingly choose to provide a wide range of services through cooperation with other local governments. Providing complex services through intergovernmental units creates collaboration risks and collective action dilemmas that need to be mitigated. Based on a longitudinal case study, an investigation is made into the dynamic processes in the governance of a public sector joint venture (JV) and the control challenges of dominated owners. The findings illustrate that the approach to mitigating collective action dilemmas is far less rational than that prescribed by the normative literature, resulting in control challenges at later stages in the relationship. Limitations in the assessment of collaboration risks are explained by drawing on resource dependence theory (RDT) arguments. Dynamic processes in the JV relationship create the need to adjust the governance system. However, adaptability is constrained by power asymmetry and control complexity.