Cooperation Catalysts? The Impact of Intergovernmental Incentive Structures on Digital Public Service Provision in German Municipalities

What is the impact of intergovernmental incentive structures on the degree of implementation of digital public services in German municipalities? I develop an original data set on municipal digitalization progress in the state of Baden-W¨urttemberg along with key indicators of relations with the state government, as well as local demand and capacity. Findings reveal initial evidence that discretionary transfers might have a small impact on local public sector digitalization, while joint state-municipal government partisan identity does not. Additionally, social, geographic, and economic factors appear to play an important role in determining the final level of digitalization. These findings both further the general understanding of the behavior of local decision makers in a multi-level government as well as provide practical insights for politicians aiming to advance digitalization initiatives on the municipal level. Future research should further investigate the concrete mechanisms behind intergovernmental incentive structures’ impact, gain deeper insights into causal mechanisms driving positive results, and assess the role of soft factors of administrative capacity.