Agency Coordination of Private Action : The Role of Relational Contracting

This symposium Article explores the previously overlooked role of relational contracting in forming and maintaining public-private partnerships. Relational contracting generally describes firms using formal but legally non-binding agreements to collaborate on shared objectives. Why do parties invest in forming elaborate contracts that they do not—and cannot—enforce in court? Contract theory suggests that the very act of contracting is relationship-building; it generates commitment, trust, cooperation, a win-win philosophy, and strengthened communication. Writing down goals and intentions allows parties to clarify expectations while maintaining flexibility for unforeseen conditions. This Article demonstrates that agencies also use relational contracting—creating unenforceable written agreements to build relationships with external actors.To shed light on agencies' use of relational contracting, this Article provides a novel review of the recovery planning process required by the Endangered Species Act. A surprising finding emerges: private groups are providing cru- cial resources and logistical support to prevent the extinction of endangered species. Tribes, states, nongovernmental organizations, and sportsmen's groups are providing necessary resources to further agency action. By orches- trating private action through recovery planning documents, the agency can garner the resources necessary to undertake species translocations, which it could not unilaterally facilitate. Although the plans are not judicially enforceable, they nevertheless play a coordinating and commitment-generating role in facilitating private actors to engage in recovery efforts. This example high-lights the broader trend of relational contracting building and formalizing re-lationships between agency and non-agency actors.Environmental impact statements, forest management plans, and recovery plans for endangered species are all examples of such “relational contracts” governing inter-agency and private-public collaborations. Viewed in this light, seemingly prosaic planning documents are, in fact, a crucial component in facilitating many agency collaborations. Descriptively, this account adds institutional detail to literatures on new governance and public-private partnerships. Normatively, it raises questions about whether the benefits of contracting offsets the potential distributional inequities and mechanisms to shroud government actions created by the practice