The predicted declines in higher education enrollment coupled with continuing increases in costs have caused administrators to rethink the tradeoffs resulting from interinstitutional cooperation and competition. In considering alternate courses, five basic questions are addressed: (1) To what extent do institutions nationally engage in cooperative relationships?, (2) What should be considered in analyzing external relationships?, (3) What are the costs and benefits of cooperation?, (4) Are there significant educational benefits beyond cost advantages?, and (5) What role will cooperation play in the future? It is shown that increases in cooperative arrangements is part of a much larger movement to ever-increasing levels of centralization and interdependence, but that objectives, longevity, and manageability must be balanced against administrative style, institutional size and resources, and the accruing costs and benefits. The underdeveloped state of methodology for quantifying costs and benefits makes precise answers to one of the most crucial questions difficult, and few examples are yet available. However, some nonquantifiable benefits have been identified: duplication avoidance, quality instruction, instructional diversity, increased access, additional funding sources, increased communication, alternative approaches, increased efficiency, greater planning and control, and leadership structures. It is concluded that an irreversible trend has begun. Appendices provide listings of major contributors to the Council for Interinstitutional Leadership-Carnegie Corporation study of cooperative cost effectiveness, and of the 25 consortia and their member institutions that had one or more programs included as case studies in the analyses. A bibliography is also included. (MSE)