Decentralization, Social Capital and Regional Convergence
AbstractBy studying the interaction between social capital and decentralization, we show that political decentralization can be a source of divergence across heterogeneous regions. In particular, we claim that since the local endowments of social capital display their effect on the economy mainly through the functioning of local institutions, decentralization enhances (hampers) growth wherever social capital is high (low). We define our hypothesis within a growth model with public capital, and use the North-South divide in Italy to assess the quantitative plausibility of our model. A calibration exercise shows that it accounts for the major swings in the Italian regional divide since 1861.
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Bibliographic InfoPaper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2013.57.
Date of creation: Jun 2013
Date of revision:
Social Capital; Convergence; Economic Growth;
Find related papers by JEL classification:
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
- N9 - Economic History - - Regional and Urban History
- R5 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-07-15 (All new papers)
- NEP-PBE-2013-07-15 (Public Economics)
- NEP-SOC-2013-07-15 (Social Norms & Social Capital)
- NEP-URE-2013-07-15 (Urban & Real Estate Economics)
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"Will East Germany Become a New Mezzogiorno?,"
CEPR Discussion Papers
1256, C.E.P.R. Discussion Papers.
- Pranab Bardhan, 2002. "Decentralization of Governance and Development," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 185-205, Fall.
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