Improving government quality in the regions of the EU and its system-wide benefits for Cohesion policy

Javier Barbero, Martin Christensen, Andrea Conte, Patrizio Lecca, Andrés Rodríguez-Pose and Simone Salotti

No 2203, Papers in Evolutionary Economic Geography (PEEG) from Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography

Abstract: We quantify the general equilibrium effects on economic growth of improving the quality of institutions at the regional level in the context of the implementation of the European Cohesion Policy for the European Union and the UK. The direct impact of changes in the quality of government is integrated in a general equilibrium model to analyse the system-wide economic effects resulting from additional endogenous mechanisms and feedback effects. The results reveal a significant direct effect as well as considerable system-wide benefits from improved government quality on economic growth. A small 5% increase in government quality across European Union regions increases the impact of Cohesion investment by up to 7% in the short run and 3% in the long run. The exact magnitude of the gains depends on various local factors, including the initial endowments of public capital, the level of government quality, and the degree of persistence over time. inked to higher mortality. Accounting for a host of potential confounders, we find robust support that regions with lower levels of both social and political trust are associated with higher excess mortality, along with citizen polarization in institutional trust in some models. On the ideological make-up regional parliaments, we find that, ceteris paribus, those that lean more ‘tan’ on the ‘gal-tan’ spectrum yielded higher excess mortality. Moreover, although we find limited evidence of elite polarization driving excess deaths on the left-right or gal-tan spectrums, partisan differences on the attitudes towards the EU demonstrated significantly higher deaths, which we argue proxies for (anti)populism. Overall, we find that both lower citizen-level trust and populist elite-level ideological characteristics of regional parliaments are associated with higher excess mortality in European regions during the first wave of the pandemic.

Keywords: government quality; cohesion; economic growth; public investment; regions; EU (search for similar items in EconPapers)
JEL-codes: C68 O17 R13 R15 (search for similar items in EconPapers)
Date: 2022-01, Revised 2022-01
New Economics Papers: this item is included in nep-ban, nep-eec, nep-geo and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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http://econ.geo.uu.nl/peeg/peeg2203.pdf Version January 2022 (application/pdf)

Related works:
Journal Article: Improving Government Quality in the Regions of the EU and its System‐Wide Benefits for Cohesion Policy (2023)
Working Paper: Improving government quality in the regions of the EU and its system-wide benefits for cohesion policy (2023)
Working Paper: Improving government quality in the regions of the EU and its system-wide benefits for Cohesion policy (2022)
Working Paper: Improving government quality in the regions of the EU and its system-wide benefits for Cohesion policy (2022)
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