This study tests whether vertical and horizontal collaborative arrangements generate organizational isomorphic pressures. Using neo-institutional theory, we explore whether local governments emulate their peers when they are (1) bound through collaborative agreements/associations (mimetic pressures), and/or (2) scrutinized by central government through a vertical agreement (coercive pressures). Municipal isomorphism is measured by municipality-dyad convergence across time based on: (1) the number of central-government grant applications submitted by municipalities and (2) use of information technologies. We test for changes in divergence between dyads on these measures using data from all possible dyads generated from 207 Chilean municipalities over 10years (2005-2014). After controlling for potential confounding factors, findings show mimetic and coercive pressures, from horizontal and vertical forms of governance, reduce a municipal dyad's divergence in terms of grant applications and use of information technologies. However, collaboration effects on municipal isomorphism are contingent on the type of collaboration. While formal municipal agreements increase a municipal dyad's convergence, municipal associations unexpectedly seem to decrease it.
