Quality of government and regional trade in the EU

• The quality of government and institutions is crucial in determining the socio-economic impact of policies.
• The European Commission is increasingly underlining the value of good governance and, in 2010, the Directorate-General for Regional and Urban Policy (DG REGIO) started funding research to gather data on the regional quality of government in collaboration with the University of Gothenburg.
• The analysis reported here presents, for the first time, evidence on the impact of government quality on regional trade flows in the European Union.
• The returns to trade depend on the quality of government, meaning that the implementation of place-based territorial policies becomes relevant to maximise economic growth, regional development and the gains from trade.

Authors:

BARBERO JIMENEZ Javier, MANDRAS Giovanni, RODRIGUEZ-CRESPO Ernesto, RODRIGUEZ-POSE Andrés