ABSTRACTRecently, subnational-level international engagement, referred to as paradiplomacy, has garnered widespread attention globally. Many cities worldwide recognise paradiplomacy as an effective tool for addressing policy issues, such as world peace and climate change, unlike state-level diplomacy, which has struggled to offer solutions. Agreements and memoranda of understanding do not automatically develop while exercising paradiplomacy. In terms of implementation, it intrinsically requires two-dimensional dynamics: inter- and intra-city. Despite extensive research, few studies have argued for intra-city arrangements to implement paradiplomacy based on public administration theories stressing public policy capability. This study focused on sister-city agreements and clarified the significance of international exchange associations as intermediaries for intra-city cooperation arrangements from the perspective of policy implementation and network research. This study used multiple regression with data from a questionnaire survey on small- and middle-sized Japanese municipalities having the sister-city relationships with Australian counterparts. It concluded that an international exchange association was a significant antecedent to sister affiliation development, identifying the significance of budget size. The results of the study have theoretical and practical implications that stress the necessity of intermediary arrangements in policy implementation.