IDEAS home Printed from https://ideas.repec.org/p/gov/wpaper/1808.html
   My bibliography  Save this paper

Institutional change and the development of lagging regions in Europe

Author

Listed:
  • Andrés Rodríguez-Pose
  • Tobias Ketterer

Abstract

According to the dominant economic theories, economic growth is the result of a combination of three factors – physical capital, human capital or labour, and innovation –plus a residual factor or error term, which represents what we do not know or cannotexplain. Depending on whether a neoclassical growth (Solow, 1956; Swan, 1956) or an endogenous growth approach is adopted (Romer, 1986: Lucas, 1988), the weight attributed to each of the components varies, but they remain, in different guises the fundamental drivers informing development policies across the world. The European Union’s (EU) regional development and cohesion policy has been no exception. The bulk of cohesion investments have been channelled towards improving the infrastructure endowment and accessibility of the least developed regions of the EU, as well as increasing the availability and quality of human resources, and developing the innovative capacity of individuals and firms across lagging areas of Europe.

Suggested Citation

  • Andrés Rodríguez-Pose & Tobias Ketterer, 2018. "Institutional change and the development of lagging regions in Europe," Working Papers. Collection A: Public economics, governance and decentralization 1808, Universidade de Vigo, GEN - Governance and Economics research Network.
    • Handle: RePEc:gov:wpaper:1808
    as

    Download full text from publisher

    File URL: http://infogen.webs.uvigo.es/WP/WP1808.pdf
    File Function: First version, 2018
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Breton, Theodore R., 2004. "Can institutions or education explain world poverty? An augmented Solow model provides some insights," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 33(1), pages 45-69, March.
    3. Andr�s Rodr�guez-Pose & Enrique Garcilazo, 2015. "Quality of Government and the Returns of Investment: Examining the Impact of Cohesion Expenditure in European Regions," Regional Studies, Taylor & Francis Journals, vol. 49(8), pages 1274-1290, August.
    4. David Roodman, 2009. "How to do xtabond2: An introduction to difference and system GMM in Stata," Stata Journal, StataCorp LLC, vol. 9(1), pages 86-136, March.
    5. Riccardo Crescenzi & Marco Di Cataldo & Andrés Rodríguez-Pose, 2016. "Government Quality And The Economic Returns Of Transport Infrastructure Investment In European Regions," Journal of Regional Science, Wiley Blackwell, vol. 56(4), pages 555-582, September.
    6. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    7. Kaufmann, Daniel & Kraay, Aart & Mastruzzi, Massimo, 2007. "Governance Matters VI: Aggregate and Individual Governance Indicators, 1996-2006," Policy Research Working Paper Series 4280, The World Bank.
    8. Andr�s Rodr�guez-Pose, 2013. "Do Institutions Matter for Regional Development?," Regional Studies, Taylor & Francis Journals, vol. 47(7), pages 1034-1047, July.
    9. Becker, Sascha O. & Egger, Peter H. & von Ehrlich, Maximilian, 2010. "Going NUTS: The effect of EU Structural Funds on regional performance," Journal of Public Economics, Elsevier, vol. 94(9-10), pages 578-590, October.
    10. Simona Iammarino & Andrés Rodriguez-Pose & Michael Storper, 2019. "Regional inequality in Europe: evidence, theory and policy implications," Journal of Economic Geography, Oxford University Press, vol. 19(2), pages 273-298.
    11. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 407-437.
    12. John C. Driscoll & Aart C. Kraay, 1998. "Consistent Covariance Matrix Estimation With Spatially Dependent Panel Data," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 549-560, November.
    13. T. W. Swan, 1956. "ECONOMIC GROWTH and CAPITAL ACCUMULATION," The Economic Record, The Economic Society of Australia, vol. 32(2), pages 334-361, November.
    14. Aadne Cappelen & Fulvio Castellacci & Jan Fagerberg & Bart Verspagen, 2003. "The Impact of EU Regional Support on Growth and Convergence in the European Union," Journal of Common Market Studies, Wiley Blackwell, vol. 41(4), pages 621-644, September.
    15. Riccardo Crescenzi & Andrés Rodríguez-Pose, 2012. "Infrastructure and regional growth in the European Union," Papers in Regional Science, Wiley Blackwell, vol. 91(3), pages 487-513, August.
    16. Fisman, Raymond & Gatti, Roberta, 2002. "Decentralization and corruption: evidence across countries," Journal of Public Economics, Elsevier, vol. 83(3), pages 325-345, March.
    17. Grigorian, David A. & Martinez, Albert, 2000. "Industrial growth and the quality of institutions : what do (transition) economies have to gain from the Rule of Law?," Policy Research Working Paper Series 2475, The World Bank.
    18. Tobias Ketterer & Andrés Rodríguez-Pose, 2015. "Local quality of government and voting with one’s feet," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 55(2), pages 501-532, December.
    19. Sjoerd Beugelsdijk & Ton Van Schaik, 2005. "Differences in social capital between 54 Western European regions," Regional Studies, Taylor & Francis Journals, vol. 39(8), pages 1053-1064.
    20. Guido Pellegrini & Flavia Terribile & Ornella Tarola & Teo Muccigrosso & Federica Busillo, 2013. "Measuring the effects of European Regional Policy on economic growth: A regression discontinuity approach," Papers in Regional Science, Wiley Blackwell, vol. 92(1), pages 217-233, March.
    21. Daniel Hoechle, 2007. "Robust standard errors for panel regressions with cross-sectional dependence," Stata Journal, StataCorp LLC, vol. 7(3), pages 281-312, September.
    22. Antonio Afonso & Ludger Schuknecht & Vito Tanzi, 2010. "Public sector efficiency: evidence for new EU member states and emerging markets," Applied Economics, Taylor & Francis Journals, vol. 42(17), pages 2147-2164.
    23. Cem Ertur & Wilfried Koch, 2006. "Regional disparities in the European Union and the enlargement process: an exploratory spatial data analysis, 1995–2000," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 40(4), pages 723-765, December.
    24. Akçomak, I. Semih & ter Weel, Bas, 2009. "Social capital, innovation and growth: Evidence from Europe," European Economic Review, Elsevier, vol. 53(5), pages 544-567, July.
    25. Andrés Rodríguez-Pose & Marco Di Cataldo, 2015. "Quality of government and innovative performance in the regions of Europe," Journal of Economic Geography, Oxford University Press, vol. 15(4), pages 673-706.
    26. Antonio Afonso & Sonia Fernandes, 2006. "Measuring local government spending efficiency: Evidence for the Lisbon region," Regional Studies, Taylor & Francis Journals, vol. 40(1), pages 39-53.
    27. George Halkos & Aksel Sundström & Nickolaos Tzeremes, 2015. "Regional environmental performance and governance quality: a nonparametric analysis," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 17(4), pages 621-644, October.
    28. Pranab Bardhan, 1997. "Corruption and Development: A Review of Issues," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1320-1346, September.
    29. Vito Tanzi, 1998. "Corruption Around the World: Causes, Consequences, Scope, and Cures," IMF Staff Papers, Palgrave Macmillan, vol. 45(4), pages 559-594, December.
    30. repec:bla:jcmkts:v:41:y:2003:i::p:621-644 is not listed on IDEAS
    31. Juan R. Cuadrado-Roura & Ron Martin & Andrés Rodríguez-Pose, 2016. "The economic crisis in Europe: urban and regional consequences," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 9(1), pages 3-11.
    32. Nicholas Charron & Lewis Dijkstra & Victor Lapuente, 2014. "Regional Governance Matters: Quality of Government within European Union Member States," Regional Studies, Taylor & Francis Journals, vol. 48(1), pages 68-90, January.
    33. Mr. Vito Tanzi, 1998. "Corruption Around the World: Causes, Consequences, Scope, and Cures," IMF Working Papers 1998/063, International Monetary Fund.
    34. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Andrés Rodríguez‐Pose, 2020. "Institutions and the fortunes of territories," Regional Science Policy & Practice, Wiley Blackwell, vol. 12(3), pages 371-386, June.
    2. Rodríguez-Pose, Andrés & Bartalucci, Federico & Lozano-Gracia, Nancy & Dávalos, María, 2024. "Overcoming left-behindedness. Moving beyond the efficiency versus equity debate in territorial development," LSE Research Online Documents on Economics 125629, London School of Economics and Political Science, LSE Library.
    3. Carlos San Juan Mesonada & Carlos Sunyer Manteiga, 2021. "European Structural Funds and Resilient and Recovery Facility Governance," EconPol Working Paper 67, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    4. Mohl, P. & Hagen, T., 2010. "Do EU structural funds promote regional growth? New evidence from various panel data approaches," Regional Science and Urban Economics, Elsevier, vol. 40(5), pages 353-365, September.
    5. Antonella Rita Ferrara & Rosanna Nisticò, 2019. "Does Institutional Quality Matter for Multidimensional Well-Being Inequalities? Insights from Italy," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 145(3), pages 1063-1105, October.
    6. Paolo Di Caro & Ugo Fratesi, 2022. "One policy, different effects: Estimating the region‐specific impacts of EU cohesion policy," Journal of Regional Science, Wiley Blackwell, vol. 62(1), pages 307-330, January.
    7. Rodríguez-Pose, Andrés & Ketterer, Tobias, 2016. "Institutions vs. ‘First-Nature’ Geography – What Drives Economic Growth in Europe’s Regions?," CEPR Discussion Papers 11322, C.E.P.R. Discussion Papers.
    8. Andrés Rodríguez-Pose & Vinko Muštra, 2022. "The economic returns of decentralisation: Government quality and the role of space," Environment and Planning A, , vol. 54(8), pages 1604-1622, November.
    9. Andrés Rodríguez-Pose & Callum Wilkie, 2018. "Strategies of gain and strategies of waste: What determines the success of development intervention?," Papers in Evolutionary Economic Geography (PEEG) 1826, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jul 2018.
    10. Ignacio Sacristán López-Bravo & Carlos San Juan Mesonada, 2022. "Effects of Policy Mix on European Regional Convergence," EconPol Working Paper 73, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    11. Tobias Hagen & Philipp Mohl, 2011. "Econometric Evaluation of EU Cohesion Policy: A Survey," Chapters, in: Miroslav N. Jovanović (ed.), International Handbook on the Economics of Integration, Volume III, chapter 16, Edward Elgar Publishing.
    12. Tobias D. Ketterer & Andrés Rodríguez‐Pose, 2018. "Institutions vs. ‘first‐nature’ geography: What drives economic growth in Europe's regions?," Papers in Regional Science, Wiley Blackwell, vol. 97(S1), pages 25-62, March.
    13. Jonathan Muringani & Rune Dahl Fitjar & Andrés Rodríguez-Pose, 2024. "Political trust and economic development in European regions," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 73(4), pages 2059-2089, December.
    14. Martina Vukašina & Ines Kersan-Škabiæ & Edvard Orliæ, 2022. "Impact of European structural and investment funds absorption on the regional development in the EU–12 (new member states)," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 17(4), pages 857-880, December.
    15. Kostakis, Ioannis & Lolos, Sarantis & Doulgeraki, Charikleia, 2020. "Cultural Heritage led Growth: Regional evidence from Greece (1998-2016)," MPRA Paper 98443, University Library of Munich, Germany.
    16. Panagiotis KOUDOUMAKIS & George BOTZORIS & Angelos PROTOPAPAS, 2021. "The Contribution Of Cohesion Policy To The Development And Convergence Of The Regions Of The European Union," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(2), pages 277-290, June.
    17. Andrés Rodríguez-Pose & Roberto Ganau, 2022. "Institutions and the productivity challenge for European regions," Journal of Economic Geography, Oxford University Press, vol. 22(1), pages 1-25.
    18. Cutrini, Eleonora & Mendez, Carlos, 2023. "Convergence clubs and spatial structural change in the European Union," Structural Change and Economic Dynamics, Elsevier, vol. 67(C), pages 167-181.
    19. Filip Hruza & Stanislav Volcík & Jan Žácek, 2019. "The Impact of EU Funds on Regional Economic Growth of the Czech Republic," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 69(1), pages 76-94, February.
    20. Egunjobi T. Adenike, 2013. "An econometric analysis of the impact of Corruption on economic growth in Nigeria," E3 Journal of Business Management and Economics., E3 Journals, vol. 4(3), pages 054-065.

    More about this item

    Keywords

    changes; development; regions; Europe.;
    All these keywords.

    JEL classification:

    • H76 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other Expenditure Categories
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O21 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Planning Models; Planning Policy
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gov:wpaper:1808. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Patricio Sanchez-Fernandez (email available below). General contact details of provider: https://edirc.repec.org/data/geviges.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.