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Institutional change and the development of lagging regions in Europe

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  • Rodríguez-Pose, Andrés
  • Ketterer, Tobias

Abstract

This paper assesses whether both the levels and the degree of change in government quality influence regional economic performance in the European Union and, in particular, in its lagging regions. The results of the econometric analysis, covering 249 NUTS-2 regions for the period 1999–2013, suggest that (1) government quality matters for regional growth; (2) relative improvements in quality of government are a powerful driver of development; (3) one-size-fits-all policies for lagging regions are not the solution; (4) government quality improvements are essential for low-growth regions; and (5) in low-income regions basic endowment shortages are still the main barrier to development. In particular, low-growth regions in Southern Europe stand to benefit the most from improvements in government quality, while in low-income regions of Central and Eastern Europe, investments in the traditional drivers of growth remain the main factors behind successful economic trajectories.

Suggested Citation

  • Rodríguez-Pose, Andrés & Ketterer, Tobias, 2019. "Institutional change and the development of lagging regions in Europe," LSE Research Online Documents on Economics 100721, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:100721
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    economic growth; government quality; institutional change; regions; EU;
    All these keywords.

    JEL classification:

    • N0 - Economic History - - General

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