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Institutional change and the development of lagging regions in Europe

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  • Andrés Rodríguez-Pose
  • Tobias Ketterer

Abstract

In this paper we assess whether both the levels and the degree of change in government quality influence regional economic performance in the European Union (EU) and, in particular, in its lagging regions. The results of the econometric analysis, covering 249 NUTS2 regions for the period between 1999 and 2013, suggest that: a) government quality matters for regional growth; b) relative improvements in quality of government are a powerful driver of development; c) one-size-fits-all policies for lagging regions are not the solution; d) government quality improvements are essential for low growth regions; and e) in low income regions basic endowment shortages are still the main barrier to development. In particular, low growth regions in Southern Europe stand to benefit the most from improvements in government quality, while in low income regions of Central and Eastern Europe, investments in the traditional drivers of growth remain the main factors behind successful economic trajectories.

Suggested Citation

  • Andrés Rodríguez-Pose & Tobias Ketterer, 2019. "Institutional change and the development of lagging regions in Europe," Papers in Evolutionary Economic Geography (PEEG) 1915, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised May 2019.
    • Handle: RePEc:egu:wpaper:1915
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    More about this item

    Keywords

    Economic growth; government quality; institutional change; regions; EU;
    All these keywords.

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R50 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - General

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