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Territory and economic development: institutional flaws

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  • Rui Nuno Baleiras

Abstract

This is a policy paper on the contribution of Portuguese public policies to economic growth and development. Such contribution is mediated by space inasmuch as the effectiveness of public action hinges critically on how policies mobilise regional development drivers. These drivers come out of a digression on economic theory explanations for growth and development which also helps to realise that markets trigger contradictory outcomes and assure neither durable progress everywhere nor long-term real convergence. The international evidence on regional development policies tracked herein unveils two facts: governments may also fail and governments can improve their own performance. Translating lessons from scientific knowledge and international empirical evidence to Portugal allows us to identify a number of flaws in the Portuguese institutional architecture and to recommend solution avenues to make the economic development of Portuguese territories more inclusive and sustainable. These recommendations bet on place-based sectorally integrated approaches which go through a significant improvement in horizontal and vertical governance mechanisms, and the adoption of policy tools headed towards the internalisation of association economies between the three territorial layers of government and the regional development actors in civil society.

Suggested Citation

  • Rui Nuno Baleiras, 2014. "Territory and economic development: institutional flaws," CFP Occasional Papers 03/2014, Portuguese Public Finance Council.
    • Handle: RePEc:alf:opaper:2014-03
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