Horizontal inter-municipal collaboration driving innovation through circular public procurement

Horizontal collaboration in municipalities is increasingly promoted to foster innovation in circular construction through circular public procurement (CPP), yet the diffusion of such practices remains uneven. Drawing on a qualitative study of Swedish municipalities, this paper explores how inter-municipal collaboration addresses the challenges of implementing CPP. By conceptualizing CPP as a form of system innovation, the paper positions municipalities as key intermediaries and examines how inter-municipal collaboration supports learning, capacity building, and experimentation across projects and organizations. The findings show that municipalities face persistent legal, organizational, operational, cultural, and financial challenges. Yet, horizontal collaboration enables shared learning, collective sensemaking, and resource pooling needed to move beyond isolated pilot projects. An analysis of six dimensions and three functions of horizontal inter-municipal collaboration, namely shared knowledge creation, collective capacity building, and experimentation, contribute to the literature on CPP and circular construction transitions. This position is achieved by having conceptualized municipal collaboration as a form of connectivity, specifically, a dynamic process enabling coordinated learning and systemic innovation. From a practice perspective, inter-municipal collaboration functions as an institutional infrastructure for scaling circular practices across fragmented construction systems, while also revealing the uneven diffusion of such innovation across the municipalities.