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Decentralization, Social Capital and Regional Convergence

Author

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  • Luciano Mauro

    (Università di Trieste, Italy, Dipartimento di Scienze Economiche Aziendali, Statistiche e Matematiche)

  • Francesco Pigliaru

    (Università di Cagliari and CRENoS, Italy Dipartimento di Scienze Economiche e Aziendali)

Abstract

By 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.

Suggested Citation

  • Luciano Mauro & Francesco Pigliaru, 2013. "Decentralization, Social Capital and Regional Convergence," Working Papers 2013.57, Fondazione Eni Enrico Mattei.
  • Handle: RePEc:fem:femwpa:2013.57
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    References listed on IDEAS

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    1. Andrea Boltho & Wendy Carlin & Pasquale Scaramozzino, 1999. "Will East Germany become a new Mezzogiorno?," Chapters,in: Economic Growth and Change, chapter 13 Edward Elgar Publishing.
    2. 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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    Cited by:

    1. repec:ces:ifofor:v:18:y:2017:i:2:p:26-33 is not listed on IDEAS
    2. F. Pastore, 2015. "The Mezzogiorno and Crisis after Market and State Failures. A Review of Economic Literature," Rivista economica del Mezzogiorno, Società editrice il Mulino, issue 3-4, pages 525-582.
    3. Francesco Pastore, 2017. "Getting It Right: Youth Employment Policy within the EU," CESifo Forum, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 18(2), pages 26-33, July.
    4. Giannola, Adriano & Petraglia, Carmelo & Scalera, Domenico, 2016. "Net fiscal flows and interregional redistribution in Italy: A long-run perspective (1951–2010)," Structural Change and Economic Dynamics, Elsevier, vol. 39(C), pages 1-16.

    More about this item

    Keywords

    Social Capital; Convergence; Economic Growth;

    JEL classification:

    • O4 - Economic Development, Innovation, 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

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