Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/265241 
Year of Publication: 
2022
Series/Report no.: 
JRC Working Papers on Territorial Modelling and Analysis No. 04/2022
Publisher: 
European Commission, Joint Research Centre (JRC), Seville
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.
Subjects: 
government quality
cohesion
economic growth
public investment
regions
EU
JEL: 
C68
O17
R13
R15
Creative Commons License: 
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Document Type: 
Working Paper

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