Private Cooperation for the Public Good
This is a story about how citizens in rural towns organized cooperatives, corporations, and networks with distant collaborators to fill roles that traditional private firms and government agencies wouldn't fill in their locations. It is about how private cooperation can overcome the market failures that arise from scale (dis-) economies and externalities. It is also about the implications of central place theory and the product cycle for business recruiting.
Rural citizens and businesses can and do successfully organize themselves without relying on government services, subsidies, or programs. Citizens can do some things unilaterally; other things require collaboration across communities, but not necessarily neighboring communities. Collaboration between neighbors is an asset on projects subject to scale economies and benefits, which decline with distance. But collaboration between neighbors is a liability on projects subject to scale economies whose benefits decline with proximity. In that case, given there are returns to scale, it is better to collaborate with far away entities. This case study is about the formation, activity, and outcomes at all three levels: cooperative activities of citizens across many towns ( NIPCO); unilateral activities of private citizens in one town (Manning); and collaborative activity of citizens in three nonproximate towns ( WITECC).
Iowa may be best known to students of community development as the place where Brian Berry ( 1967) developed and tested "Central Place Theory." One of