IDEAS home Printed from https://ideas.repec.org/p/fem/femwpa/2013.57.html
   My bibliography  Save this paper

Decentralization, Social Capital and Regional Convergence

Author

Listed:
  • Luciano Mauro

    (Università di Trieste, Italy, Dipartimento di Scienze Economiche Aziendali, Statistiche e Matematiche)

  • Francesco Pigliaru

    (Università di Cagliari and CRENoS, Italy Dipartimento di Scienze Economiche e Aziendali)

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.

Suggested Citation

  • Luciano Mauro & Francesco Pigliaru, 2013. "Decentralization, Social Capital and Regional Convergence," Working Papers 2013.57, Fondazione Eni Enrico Mattei.
    • Handle: RePEc:fem:femwpa:2013.57
    as

    Download full text from publisher

    File URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2013-057.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Bean, Charles R, 1994. "European Unemployment: A Survey," Journal of Economic Literature, American Economic Association, vol. 32(2), pages 573-619, June.
    2. Besley, Timothy & Coate, Stephen, 2003. "Centralized versus decentralized provision of local public goods: a political economy approach," Journal of Public Economics, Elsevier, vol. 87(12), pages 2611-2637, December.
    3. Andrea Boltho & Wendy Carlin & Pasquale Scaramozzino, 1999. "Will East Germany become a new Mezzogiorno?," Chapters, in: John Adams & Francesco Pigliaru (ed.), Economic Growth and Change, chapter 13, Edward Elgar Publishing.
    4. Pranab Bardhan, 2002. "Decentralization of Governance and Development," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 185-205, Fall.
    5. Barro, Robert J, 1990. "Government Spending in a Simple Model of Endogenous Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 103-126, October.
    6. Robert J. Barro & Paul Romer, 1993. "Economic Growth (1992)," NBER Books, National Bureau of Economic Research, Inc, number barr93-1.
    7. Robert J. Barro & Xavier Sala-i-Martin, 1991. "Convergence across States and Regions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1), pages 107-182.
    8. Wendy Carlin, 2010. "Good Institutions are not enough: Ongoing Challenges of East German Development," CESifo Working Paper Series 3204, CESifo.
    9. Barro, Robert J & Sala-i-Martin, Xavier, 1992. "Convergence," Journal of Political Economy, University of Chicago Press, vol. 100(2), pages 223-251, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bonanno, Graziella & D’Orio, Giovanni & Lombardo, Rosetta, 2020. "Generating well-being and efficiency: Evidence from Italy," Economic Analysis and Policy, Elsevier, vol. 65(C), pages 262-275.
    2. F. Pastore, 2015. "The Mezzogiorno and Crisis after Market and State Failures. A Review of Economic Literature," Rivista economica del Mezzogiorno, Società editrice il Mulino, issue 3-4, pages 525-582.
    3. Francesco Pastore, 2017. "Getting It Right: Youth Employment Policy within the EU," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 18(02), pages 26-33, July.
    4. Jonathan Muringani, 2022. "Trust as a catalyst for regional growth in a decentralized Europe: The interplay between informal and formal institutions in driving economic growth," Journal of Regional Science, Wiley Blackwell, vol. 62(5), pages 1229-1249, November.
    5. Piras, Romano, 2022. "Structural change, growth, and convergence in Italy: 1951–1970," Structural Change and Economic Dynamics, Elsevier, vol. 61(C), pages 362-379.
    6. Giannola, Adriano & Petraglia, Carmelo & Scalera, Domenico, 2016. "Net fiscal flows and interregional redistribution in Italy: A long-run perspective (1951–2010)," Structural Change and Economic Dynamics, Elsevier, vol. 39(C), pages 1-16.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Francesco Pigliaru & Luciano Mauro, 2011. "Social Capital, Institutions and Growth: Further Lessons from the Italian Regional Divide," ERSA conference papers ersa11p1866, European Regional Science Association.
    2. Mauro, Luciano & Pigliaru, Francesco & Carmeci, Gaetano, 2023. "Decentralization, social capital, and regional growth: The case of the Italian North-South divide," European Journal of Political Economy, Elsevier, vol. 78(C).
    3. José Manuel González-Páramo & Diego Martínez López, "undated". "Public Investment and Convergence in the Spanish Regions," Studies on the Spanish Economy 112, FEDEA.
    4. Sandy Dall'erba & Julie Le Gallo, 2000. "The Impact of EU Regional Policy Revisited," Regional and Urban Modeling 283600021, EcoMod.
    5. Atolia, Manoj & Chatterjee, Santanu & Turnovsky, Stephen J., 2010. "How misleading is linearization? Evaluating the dynamics of the neoclassical growth model," Journal of Economic Dynamics and Control, Elsevier, vol. 34(9), pages 1550-1571, September.
    6. Erich Gundlach, 2003. "Growth Effects of EU Membership: The Case of East Germany," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 30(3), pages 237-270, September.
    7. Martina Vukašina & Ines Kersan-Škabiæ & Edvard Orliæ, 2022. "Impact of European structural and investment funds absorption on the regional development in the EU–12 (new member states)," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 17(4), pages 857-880, December.
    8. Charles R. Hulten & Robert M. Schwab, 1993. "Endogenous Growth, Public Capital, and the Convergence of Regional Manufacturing Industries," NBER Working Papers 4538, National Bureau of Economic Research, Inc.
    9. Sandy Dall’erba & Julie Le Gallo, 2007. "The Impact of EU Regional Support on Growth and Employment," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 57(7-8), pages 324-340, September.
    10. Mauro, Luciano & Pigliaru, Francesco & Carmeci, Gaetano, 2018. "Decentralization and growth: Do informal institutions and rule of law matter?," Journal of Policy Modeling, Elsevier, vol. 40(5), pages 873-902.
    11. Xavier Sala-i-Martin, 1990. "Lecture Notes on Economic Growth(I): Introduction to the Literature and Neoclassical Models," NBER Working Papers 3563, National Bureau of Economic Research, Inc.
    12. Celine Bonnefond, 2014. "Growth Dynamics And Conditional Convergence Among Chinese Provinces: A Panel Data Investigation Using System Gmm Estimator," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 39(4), pages 1-25, December.
    13. Stefano Magrini & Paul Cheshire, 2006. "European Urban Growth: now for some problems of spaceless and weightless econometrics," Working Papers 2006_23, Department of Economics, University of Venice "Ca' Foscari".
    14. Persson, Joakim, 1999. "Demographic and Per Capita Income Dynamics: A Convergence Study on Demographics, Human Capital, and Per Capita Income for the US States," Working Paper Series 156, Trade Union Institute for Economic Research.
    15. Julie Le Gallo, 2004. "Space-Time Analysis of GDP Disparities among European Regions: A Markov Chains Approach," International Regional Science Review, , vol. 27(2), pages 138-163, April.
    16. Douglas Holtz-Eakin, 1992. "Solow and the States: Capital Accumulation, Productivity and Economic Growth," NBER Working Papers 4144, National Bureau of Economic Research, Inc.
    17. Mari-Carmen Puigcerver-PeUNICODE{0xf1}alver, 2004. "The Impact of Structural Funds Policy on European Regions Growth. A Theoretical and Empirical Approach," Econometric Society 2004 Latin American Meetings 141, Econometric Society.
    18. Joshua H. Gallin, 1999. "Net migration and state labor market dynamics," Finance and Economics Discussion Series 1999-16, Board of Governors of the Federal Reserve System (U.S.).
    19. Capolupo, Rosa, 2009. "The New Growth Theories and Their Empirics after Twenty Years," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 3, pages 1-72.
    20. Barot, Bharat, 2002. "Growth and Business Cycles for the Swedish Economy 1963-1999," Working Papers 79, National Institute of Economic Research.

    More about this item

    Keywords

    Social Capital; Convergence; Economic Growth;
    All these keywords.

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • N9 - Economic History - - Regional and Urban History
    • R5 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fem:femwpa:2013.57. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Alberto Prina Cerai (email available below). General contact details of provider: https://edirc.repec.org/data/feemmit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.