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Government quality and regional growth in the enlarged European Union: Components, evolution and spatial spillovers

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  • Jesús Peiró-Palomino

    (Departament d’Estructura Econòmica and INTECO, Universitat de València.)

Abstract

This paper investigates the relationship between government quality and regional economic growth in 206 EU-28 regions during the period 2010-2017. We use the European Quality of Government Index (EQI), based on the pillars of quality, impartiality and corruption and provide results for both the aggregated index and its three components. We find a negative evolution of government quality across regions over the studied period. Overall, the econometric results, obtained via Ordinary Least Squares and Spatial Lag models suggest that improvements in the quality of government positively contribute to economic growth, although larger impacts are found for EU-15 regions in comparison with regions from countries that joined the European Union after 2004. Finally, we find that spatial spillovers matter, as a great proportion of the effect of government quality on growth is indirect. In that regard, when analyzing different components of government quality in the spatial models, a clear influence is found for corruption and impartiality, whereas results are weaker for the quality of public services.

Suggested Citation

  • Jesús Peiró-Palomino, 2019. "Government quality and regional growth in the enlarged European Union: Components, evolution and spatial spillovers," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 45, pages 17-37.
    • Handle: RePEc:ris:invreg:0410
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    Keywords

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    JEL classification:

    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • 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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