The Cost Savings in Inter-Organizational Cooperation: A Meta-Analytic Review and Extension

Inter-organizational cooperation is widely promoted as a strategy to improve cost efficiency in public service delivery. However, empirical findings on the efficiency gains remain mixed, and the conditions under which cost savings are realized are not well understood. To further the research field, this meta-analysis synthesizes evidence from 26 studies comprising 152 effect sizes to examine whether cooperation involving public organizations reduces service provision costs and to examine why estimated cost effects vary across studies. Through the analysis, we find a small but statistically significant cost-reducing effect (r = −.05), indicating that cooperation is associated with modestly lower service costs. The meta-regression results further show that the difficulty of achieving cost savings is significantly increased when cooperation spans multiple service areas. The estimated cost effects also vary with the study design and measurement choices: intensity-based operationalizations are associated with larger cost reductions than propensity-based measures, and quasi-experimental designs yield more conservative estimates than simple regressions. In contrast, the type of cooperation, asset specificity, and measurement difficulty do not affect cost outcomes significantly. Based on these findings, we offer cautious implications for policymakers and public managers seeking to design cost-effective cooperative service arrangements and identify priorities for future research.