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

Details

Identification
JRC128443
Publication date
21 February 2022
Author
Joint Research Centre

Description

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.

Authors

BARBERO JIMENEZ Javier, CHRISTENSEN Martin, CONTE Andrea, LECCA Patrizio, RODRÍGUEZ-POSE Andrés, SALOTTI Simone

Files

JRC128443_Improving government quality in the regions of the EU and its system-wide benefits for Cohesion policy
English
(2.68 MB - PDF)
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