What shapes the formation of interstate benchmarking networks?

Abstract

Most studies on public sector benchmarking focus on performance indicators, processes, and outcomes of managed benchmarking. This article, instead, explores the formation of spontaneous interstate benchmarking networks among U.S. state agency leaders. Informed by social comparison theory, we first recategorize benchmarking into best practice benchmarking and competitive benchmarking. Then, we quantify two benchmarking networks with a survey dataset and employ the Exponential Random Graph Model to analyze both endogenous and exogenous factors in the formation of both types of benchmarking networks. We find that the best practice benchmarking network has a popularity effect, while the competitive benchmarking network has mutuality and transitivity effects. Both types of benchmarking networks are more likely to form among states with historical policy diffusion ties and similar economic and geographic characteristics. This study contributes to the literature on public sector benchmarking and network research by exploring the factors that influence the formation of benchmarking networks.