Decentralization, Social Capital and Regional Convergence

Luciano Mauro and Francesco Pigliaru

No 2013.57, Working Papers from Fondazione Eni Enrico Mattei

Abstract: By studying the interaction between social capital and decentralization, we show that political decentralization can be a source of divergence across heterogeneous regions. In particular, we claim that since the local endowments of social capital display their effect on the economy mainly through the functioning of local institutions, decentralization enhances (hampers) growth wherever social capital is high (low). We define our hypothesis within a growth model with public capital, and use the North-South divide in Italy to assess the quantitative plausibility of our model. A calibration exercise shows that it accounts for the major swings in the Italian regional divide since 1861.

Keywords: Social Capital; Convergence; Economic Growth (search for similar items in EconPapers)
JEL-codes: N9 O4 R5 (search for similar items in EconPapers)
Date: 2013-06
New Economics Papers: this item is included in nep-pbe, nep-soc and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Working Paper: Decentralization, Social Capital and Regional Convergence (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2013.57

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