Policy decisions at the local level of government are framed by a set of institutions established at the state and local levels that determine what changes can be accomplished and through what channels. In the study of intergovernmental relations, institutions are important because they shape individuals’ actions and preferences, provide stability to collective choices, minimize transaction costs, limit choices, affect policymakers behavior and preferences, and provide incentives for political exchange (Clingermayer and Feiock, 2001).