Partnership Networks for Urban Development: How Structure is Shaped by Risk

In delivering public policy, governments worldwide increasingly partner with diverse sets of stakeholders. This spreads commercial risk, but particularly where agendas diverge, introduces new risks related to trust in relationships. The “risk hypothesis” distinguishes between networks for “cooperation” problems, where partners have high individual payoffs for uncooperative behaviors, and “coordination” problems, where partners subscribe to a common goal and uncooperative behaviors are less rewarding. We used mixed‐methods to study networks of local and state government, developers, and consultants that center on joint‐venture partnerships for developing new urban, residential projects. Statistical network methods showed that within the mix of partners involved in development projects, only state governments displayed structural patterns associated with solving “cooperation” problems (rather than coordination). In other words, the patterns of state government interactions showed they are most exposed to risky relationships. In contrast to the state governments’ apparent exposure to risk, qualitative data showed they are not only well trusted but also overall the partnership networks reported very low levels of conflict. By exploring the distribution of “cooperation” and “coordination,” we identified which stakeholders perceived most risk. In our case, how the state governments’ structure interactions in response to risky relationships leads to an overall network characterized by trust.