Circular economy transition of European regions: the role of regulative, normative, and cultural-cognitive institutions

Duygu Buyukyazici, Olivier Brossard and Ron Boschma

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: The transition towards a circular economy (CE) represents not only an economic shift but also a profound social and institutional transformation that redefines production, consumption, and policy. This study provides the first macro-level empirical assessment of the CE transition across European regions over the last two decades. It then examines how regional regulative, normative, and cultural–cognitive institutions shape regional CE performance, while also accounting for key confounding factors, including EU cohesion funds, regional autonomy, and the EU Circular Economy Action Plan (CEAP). The results reveal strong spatial and temporal heterogeneity, as well as distinct effects across institutional dimensions. Regulative institutions exhibit the most consistent positive association across and within countries. Normative institutions matter most within major regions, while cultural–cognitive institutions provide more modest support for CE efforts. Importantly, the combination of all institutional pillars is associated with the largest gains in circularity. EU cohesion funds significantly support CE progress, while the post-2015 results suggest that the CEAP reshaped the relative importance of institutional pillars. Overall, the findings highlight the importance of coordinated institutional frameworks and targeted policy support in advancing the regional CE transition.

Keywords: circular economy; circular transition; institutions; sustainability; regions (search for similar items in EconPapers)
JEL-codes: Q01 Q50 R11 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2026-08-31
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Published in European Economic Review, 31, August, 2026, 188. ISSN: 0014-2921

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