Reducing Risk in Service Sharing Agreements: Evidence from Europe, Latin America, and the United States

This paper synthesizes research from Europe, Latin America, and the Unites States on the creation of shared service arrangements supporting ICA to identify what has been learned about the sources of risks to the participants from these arrangements and the strategies the participants use to manage these risks. Arrangements to produce services with one or more organizations must deal with risks arising from three sources of transaction costs: problems of coordination, division, and defection. Efforts to promote effective regional governance require that policy makers understand these sources of transition risk and the strategies available to local officials for mitigating them. The paper concludes with a set of propositions about the adoption of the tools for reducing risk in shared service delivery arrangements that provide an agenda for future comparative research on ICA problems and the ICA framework.