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Decentralisation has frequently been sold as a means to increase well-being and development. Yet, questions remain as to whether decentralisation improves economic performance. This is possibly because decentralisation processes have often led to 'unfunded mandates', that is, a mismatch between the powers transferred to subnational tiers of government and the resources allocated to them. In this article, we analyse how unfunded mandates shape regional economic growth across 518 regions in 30 Organisation for Economic Co-operation and Development countries over the period 1997–2018. There is a negative, statistically significant, and robust impact of unfunded mandates on economic growth. This effect is higher in more politically and less fiscally decentralised regions and in regions with a higher level of wealth. Unfunded mandates thus represent a serious drag on the potential positive economic effect of political decentralisation. Hence, for those benefits to materialise, better not more decentralisation – ensuring that finance follows function – should be pursued. [ABSTRACT FROM AUTHOR]

Social capital is an important factor explaining differences in economic growth among regions. However, the key distinction between bonding social capital, which can lead to lock-in and myopia, and bridging social capital, which promotes knowledge flows across diverse groups, has been overlooked in growth research. In this paper, we address this shortcoming by examining how bonding and bridging social capital affect regional economic growth, using data for 190 regions in 21 EU countries, covering eight waves of the European Social Survey between 2002 and 2016. The findings confirm that bridging social capital is linked to higher levels of regional economic growth. Bonding social capital is highly correlated with bridging social capital and associated with lower growth when this is controlled for. We do not find significantly different effects of bonding social capital in regions with more or less bridging social capital, or vice versa. We examine the interaction between social and human capital, finding that bridging social capital is fundamental for stimulating economic growth, especially in low-skilled regions. Human capital also moderates the relationship between bonding social capital and growth, reducing the negative externalities imposed by excessive bonding. [ABSTRACT FROM AUTHOR]

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. [ABSTRACT FROM AUTHOR]

Urban economics and branches of mainstream economics – what we call the 'housing as opportunity' school of thought – have been arguing that shortages of affordable housing in dense agglomerations represent a fundamental barrier to economic development. Housing shortages are considered to limit migration into thriving cities, curtailing their expansion potential, generating rising social and spatial inequalities and inhibiting national growth. According to this dominant view, relaxing zoning and other planning regulations in the most prosperous cities is crucial to unleash the economic potential of cities and nations and to facilitate within-country migration. In this article, we contend that the bulk of the claims of the housing as opportunity approach are fundamentally flawed and lead to simplistic and misguided policy recommendations. We posit that there is no clear and uncontroversial evidence that housing regulation is a principal source of differences in home availability or prices across cities. Blanket changes in zoning are unlikely to increase domestic migration or to improve affordability for lower-income households in prosperous areas. They would, however, increase gentrification within metropolitan areas and would not appreciably decrease income inequality. In contrast to the housing models, we argue that the basic motors of all these features of the economy are the current geography of employment, wages and skills. [ABSTRACT FROM AUTHOR]

Despite a massive recent proliferation of special economic zones (SEZs), there is virtually no quantitative research on what drives their dynamism. The aim of this article is to address this gap and analyze the factors influencing SEZ performance—proxied by economic growth—in emerging countries. The article relies on two novel data sets, using nightlights data to proxy for SEZ performance, and containing a wide range of SEZ policy variables and characteristics across a large number of countries. The main results of the analysis indicate that (1) zone growth is difficult to sustain over time; (2) trying to upgrade the technological component or value added of the economy through SEZ policies is often challenging; and (3) zone size matters: larger zones have an advantage in terms of growth potential. Furthermore, country context significantly determines SEZ performance. Firms look for low-cost locations but in close proximity to large cities. Proximity to large markets as well as preexisting industrialization also increase SEZ performance. In contrast, incentives and other program-specific variables are highly context specific and not structurally correlated with SEZ performance. [ABSTRACT FROM AUTHOR]

Does the economic effect of immigrant women differ from that of immigrant men? This paper examines if gender has influenced the short- and long-term economic impact of mass migration to the United States, using census microdata from 1880 and 1910. By means of ordinary least squares (OLS) and instrumental variables (IV) estimations, the analysis shows that a concentration of immigrant women led to lower levels of development in US counties. However, immigrant women also shaped economic development positively, albeit indirectly, via their children. Communities with more children born to foreign mothers experienced greater growth than those dominated by children of foreign-born fathers or American-born parents. [ABSTRACT FROM AUTHOR]

The paper investigates (1) the evolution of urban concentration from 1985 to 2010 in 68 countries around the world and (2) the extent to which the degree of urban concentration affects national economic growth. It aims to overcome the limitations of existing empirical literature by building a new urban population dataset that allows the construction of a set of Herfindahl-Hirschman-Indices which capture a country’s urban structure in a more nuanced way than the indicators used hitherto. We find that, contrary to the general perception, urban concentration levels have on average decreased or remained stable (depending on indicator). However, these averages camouflage diverging trends across countries. The results of the econometric analysis suggest that there is no uniform relationship between urban concentration and economic growth. Urban concentration is beneficial for economic growth in high-income countries, while this effect does not hold for developing countries. The results differ from previous analyses that generally underscore the benefits of urban concentration at low levels of economic development. The results are robust to accounting for reverse causality through IV analysis, using exogenous geographic factors as instruments. [ABSTRACT FROM AUTHOR]

This article examines the link between average city size and aggregate economic growth in a total of 114 countries for the period between 1960 and 2010. The analysis--which includes pooled two-stage least-squares (2SLS), panel data analysis, system generalized method-of-moments (GMM) estimator and an instrumental variable (IV) approach--finds that, in contrast to the prevailing view, there is no universal positive relationship between average city size and economic growth and that the results vary between high-income and developing countries. In high-income countries, there is consistent evidence of a positive albeit decreasing link between city size and economic growth. In contrast, the relationship does not hold for developing countries, for which most of the coefficients display insignificant results or point towards a negative connection between both factors [ABSTRACT FROM AUTHOR]

This paper estimates the impact of public investment on regional economic growth and convergence at the NUTS 3 level in Greece. Using a new database of public expenditure per region for the period 1978-2007, it proposes a model which captures not just the impact of public investment in Greek prefectures, but also the spillover effects related to the existence of externalities from neighbouring regions. The results point to a positive long-run impact of public investment per capita on regional economic growth - but not on convergence - which also generates considerable spillover effects. However, the returns vary according to different types of public investment, with education and infrastructure spillovers having the highest impact. In general, public investment externalities seem to be more relevant for regional growth than direct public investment in each region. Finally, the impact of different types of public investment in Greece is mediated by politics and political factors, but the effect of politics disappears once we control for political-period-specific spatial-invariant variables. Resumen Este artículo estima el impacto de la inversión pública en el crecimiento económico regional y la convergencia a nivel NUTS 3 en Grecia. Haciendo uso de una nueva base de datos de gasto público por región para el periodo 1978-2007, se propone un modelo que identifica no solamente el impacto de la inversión pública en las prefecturas griegas, sino también los efectos de spillover relacionados con la existencia de externalidades procedentes de regiones vecinas. Los resultados apuntan a un impacto positivo a largo plazo de la inversión pública per cápita en el crecimiento económico regional - pero no en la convergencia - el cual genera unos efectos de spillover considerables. Sin embargo, los retornos varían de acuerdo con los diferentes tipos de inversión pública, siendo la educación y los spillovers de infraestructura los de mayor impacto. En general, las externalidades de inversión pública parecen tener una mayor relevancia para el crecimiento regional que la inversión pública directa en cada región. Para terminar, el impacto de los diferentes tipos de inversión pública en Grecia se ve influido por sus políticas y otros factores políticos, pero el efecto de las políticas desaparece una vez que se controlan las variables espacialmente-invariantes de tipo político ligadas a un periodo específico. [ABSTRACT FROM AUTHOR]

The global drive towards decentralization has been increasingly justified on the basis that greater transfers of resources to subnational governments are expected to deliver greater efficiency in the provision of public goods and services and greater economic growth. This article examines whether this is the case, by analysing the relationship between decentralization and economic growth in 21 Organization for Economic Co-operation and Development countries during the period between 1990 and 2005 and controlling not only for fiscal decentralization, but also for political and administrative decentralization. The results point towards a negative and significant association between fiscal decentralization and economic growth in the sample countries, a relationship which is robust to the inclusion of a series of control variables and to differences in expenditure preferences by subnational governments. The impact of political and administrative decentralization on economic growth is weaker and sensitive to the definition and measurement of political decentralization. [ABSTRACT FROM PUBLISHER]

Human geography is in a unique position to understand how local structural factors shape social, political, and ultimately economic outcomes. Indeed, the discipline has had much to say about the interaction between local institutions and the economy in general, and about how the broader institutions of society influence local economic development. Yet, to date, geographers have for the most part avoided debates on more generalized theories of economic growth and development. With the increasing recognition — among sociologists, political scientists and even economists — that explaining economic growth robustly requires taking into account the role of both formal society-wide institutions and local and sometimes informal institutions, geographers are in a position to make an important contribution. In order to do so, however, they will need to take greater account of the theories and developments that are taking place outside the discipline. Using the framework of community and society as complementary structural forces shaping development trajectories, this paper presents a broad overview of the principal theoretical and empirical developments in the institutionalist approaches to economic development and identifies areas in which geographical research could contribute to them. [ABSTRACT FROM AUTHOR]

Rodríguez-Pose A. and Crescenzi R. Research and development, spillovers, innovation systems, and the genesis of regional growth in Europe. Regional Studies. Research on the impact of innovation on regional economic performance in Europe has fundamentally followed three approaches: (1) the analysis of the link between investment in research and development (R&D), patents, and economic growth; (2) the study of the existence and efficiency of regional innovation systems; and (3) the examination of the geographical diffusion of regional knowledge spillovers. These complementary approaches have, however, rarely been combined. Important operational and methodological barriers have thwarted any potential cross-fertilization. This paper tries to fill this gap in the literature by combining in one model R&D, spillovers, and innovation systems approaches. A multiple regression analysis is conducted for all regions of the group of 25 European Union countries (EU-25), including measures of R&D investment, proxies for regional innovation systems, and knowledge and socio-economic spillovers. This approach allows the discrimination between the influence of internal factors and external knowledge and institutional flows on regional economic growth... [ABSTRACT FROM AUTHOR]