The digital transformation in local governments is one of the most revolutionary reform processes discussed in the current public debate. It describes the fundamental change digital innovations can bring to the work and service delivery of local governments. However, many municipalities cannot manage the digital transformation on their own and therefore require external support from public management consultants. The underlying problem is not only that the local governments` spending on consultancy services is continuously rising, despite often tight budgets, but empirical investigations have also revealed how these transformations are often far from being smooth and successful.

Given the criticism about the role of management consultants, often referred to as black boxes, and the financial costs they cause, there is a need in better understanding the role of management consultants and their relationship to local governments. Therefore, the main goal of this paper is to analyze the role of the above-mentioned actors in the reform processes and the influence on the results they yield. The paper explores both sides, administration, and consulting, specifically those active in digital transformation reforms at the local level.

For this research, the theoretical considerations draw on the principal-agent theory on one side and the stewardship theory on the other side. The former approach assumes profit-maximizing behavior of both actors as well as knowledge asymmetry. The stewardship theory proposes that stewards are motivated to act in the best interest of their principals and make decisions that are in the best interests of the overall organization. By exploring new perspectives for theorizing the client-consultant relationship, the motivation of external consultants’ behavior is analyzed as well as the interaction with the local administration. Overall, the goal of the paper is to answer the following main research questions:

(1) How do management consultants and local governments cooperate?

(2) What different modes of collaboration are there (as collaboration based on agency theory, stewardship theory, other)?

(3) Does a certain type of collaboration lead to better project results than others?

A qualitative research design is applied to explore the underlying research problem. Empirical data is collected from eight consulting projects. The cases are selected out of the national monitoring of Swiss municipalities which has been periodically conducted since 1988, with the latest data available from 2023. The conclusions are drawn from the data collected in semi-structured interviews conducted with each of the actors from the same consulting project, consultants on the one hand and local government officials on the other hand (chief digital officer or another appropriate person in the administration). Based on the results, conditions are identified which can be related to the successful implementation of public management consulting projects.

Co-production brings together a diverse range of state and non-state actors to create and deliver public services under a collaboration-based process. These processes also occur across initiatives in several disciplinary sectors. Hence, co-production knowledge is disseminated among several streams of research, ensuing their own management strategies, dynamics and perspectives. This study stretches attention to co-production of public services in the urban renewal context. Context in co-production implementation and management has attracted limited attention from scholars despite its relevance since context characteristics would influence co-production implementation conditions, resulting in various practices of co-production (Joshi & Moore, 2004) while shaping coproducers’ characteristics (Pollitt, 2008).

Therefore, a cross-disciplinary effort of urban planning theory, co-production, and participation research seems essential. Furthermore, studying co-production management, effects, evaluation, and dynamics could be challenging because of the fragmented literature as attention is concentrated on specific aspects without a holistic vision of the process.

To address the gaps, this study examines the distinctive features of co-production, key elements of the process, dynamics, and the links with effective or assumed effects, following the trails of the systematic literature review.

Early findings suggest that co-production in urban renewal services lacks information on broad parameters of co-production implementation and how public managers view co-production in the specific context analysed, particularly practitioners working in the field. Further empirical research would clarify these issues by assessing the advances in understanding the implementation of co-production processes in the urban renewal context.