Circular Economy Transition of European Regions: The Role of Regulative, Normative, and Cultural-Cognitive Institutions

The transition toward a circular economy (CE) represents not only an economic shift but also a profound social transformation that fundamentally redefines production, consumption, and policy patterns; thus, it necessitates comprehensive institutional change. This study presents the first macro-level empirical assessment of the CE transition across European regions over recent decades. Afterwards, it examines how regional regulative, normative, and cultural/cognitive institutions influence regional CE performance by also considering crucial confounding factors including EU cohesion funds, regional decentralisation, and the EU Circular Economy Action Plan (CEAP). The results reveal strong spatial and temporal heterogeneity as well as the diverse effects of different institutions. Regulative institutions exhibit the most consistent positive effect across and within countries. Normative values matter most within regions, while cultural-cognitive factors modestly support CE efforts. Importantly, combination of all institutional pillars yields the greatest circularity gains. EU cohesion funds significantly boost CE progress, especially in less developed regions, while CEAP marks a structural shift in the role of institutions post-2015. Overall, the findings highlight the importance of coordinated institutional frameworks and targeted policy support for advancing the regional CE transition.