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Do Institutions Matter for Regional Development?

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  • Andr�s Rodr�guez-Pose

Abstract

Rodr�guez-Pose A. Do institutions matter for regional development?, Regional Studies . This paper discusses whether institutions matter for regional development and how to integrate them in regional development strategies. It is found that while institutions are crucial for economic development, generating an institution-based regional development strategy is likely to be undermined by the lack of definition of what are efficient institutions. Problems related to the measurement of institutions, to their space and time variability, to the difficulties in establishing the right mix of formal and informal institutions, and to the endogeneity between institutions and economic development make one-size-fits-all approaches to operationalizing institutions difficult. The paper posits that, in order to overcome these problems, it is crucial to distinguish between the 'institutional environment' and 'institutional arrangements', that is, to target not the institutions which shape the unique character of any territory, but the institutional factors that represent barriers for the efficacy of other factors influencing economic development (that is, education, training and skills, innovation, infrastructure and the like).

Suggested Citation

  • Andr�s Rodr�guez-Pose, 2013. "Do Institutions Matter for Regional Development?," Regional Studies, Taylor & Francis Journals, vol. 47(7), pages 1034-1047, July.
    • Handle: RePEc:taf:regstd:v:47:y:2013:i:7:p:1034-1047
    DOI: 10.1080/00343404.2012.748978
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    1. Douglass C. North, 2005. "Introduction to Understanding the Process of Economic Change," Introductory Chapters, in: Understanding the Process of Economic Change, Princeton University Press.
    2. Philippe Aghion & Steven Durlauf (ed.), 2005. "Handbook of Economic Growth," Handbook of Economic Growth, Elsevier, edition 1, volume 1, number 1.
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