Download full text
(2.099Mb)
Citation Suggestion
Please use the following Persistent Identifier (PID) to cite this document:
https://nbn-resolving.org/urn:nbn:de:0168-ssoar-97229-3
Exports for your reference manager
Decentralization, social capital, and regional growth: The case of the Italian North-South divide
[journal article]
Abstract
This paper aims to show how a region's constant level of social capital may have a very different impact on its economic growth depending on whether the central or the local level of government is responsible for regional policy. Our case study is the economic performance of Northern and Southern It... view more
This paper aims to show how a region's constant level of social capital may have a very different impact on its economic growth depending on whether the central or the local level of government is responsible for regional policy. Our case study is the economic performance of Northern and Southern Italy in the post-World War II period, when a long phase of regional convergence came to a sudden halt in the early 1970s. We focus on the economic effects of the 1970s institutional reforms on government decentralization and wage bargaining. Our main hypothesis is that decentralization allocates the provision of public capital to institutions, the local ones, more exposed to a territory's social capital. Since social capital is lower in the Southern regions, decentralization made their developmental policies less effective from 1970 onwards, and regional inequality increased. We build an endogenous growth model augmented to include the interaction between social capital and public investment as well as the reform of the Italian labour market. We calibrate our model using data of the Italian regions for 1951-71. Our quantitative results indicate that decentralization triggered the influence of local social capital on growth and played a central role in halting the convergence path of the low-social-capital regions.... view less
Keywords
Italy; social capital; economic growth; regional policy; public investment; decentralization; institutional change; local economy; regional difference; regional comparison; inequality; EVS
Classification
Economic and Social Geography
National Economy
Free Keywords
Regional convergence; Decentralization; EVS 1981-2008 (ZA4804)
Document language
English
Publication Year
2023
Journal
European Journal of Political Economy, 78 (2023)
DOI
https://doi.org/10.1016/j.ejpoleco.2023.102363
ISSN
0176-2680
Status
Published Version; peer reviewed