ABSTRACT. The paper examines the debates regarding place-neutral versus place-based policies for economic development. The analysis is set in the context of how development policy thinking on the part of both scholars and international organizations has evolved over several decades. Many of the previously accepted arguments have been called into question by the impacts of globalization and a new response to these issues has emerged, a response both to these global changes and also to nonspatial development approaches. The debates are highlighted in the context of a series of major reports recently published on the topic. The cases of the developing world and the European Union are used as examples of how in this changing context development intervention should increasingly focus on efficiency and social inclusion at the expense of an emphasis on territorial convergence and how strategies should consider economic, social, political, and institutional diversity in order to maximize both the local and the aggregate potential for economic development.

The revenge of the places that don't matter (and what to do about it) Article (Accepted version) (Refereed)

This paper discusses whether institutions matter for regional development and how to integrate them in regional development strategies. It finds that while institutions are crucial for economic development, generating an institution-based regional development strategy is likely to be undermined by the lack of definition of what are adequate, solid, and efficient institutions. Problems related to the measurement of institutions, to their space and time variability, to the difficulties in establishing the right mix of formal and informal institutions, and to the endogeneity between institutions and economic development make one-size-fits-all approaches to operationalizing institutions difficult. Development strategies specifically tailored to the conditions of different regional institutional environments across regions may yield greater returns. working papers series

Abstract:Research on the impact of innovation on regional economic performance in Europe has fundamentally followed three approaches: a) the analysis of the link between investment in R&D, patents, and economic growth; b) the study of the existence and efficiency of regional innovation systems; and c) the examination of the geographical diffusion of regional knowledge spillovers. These complementary approaches have, however, rarely been combined. Important operational and methodological barriers have thwarted any potential cross-fertilization. In this paper, we try to fill this gap in the literature by combining in one model R&D, spillovers, and innovation systems approaches. A multiple regression analysis is conducted for all regions of the EU-25, including measures of R&D investment, proxies for regional innovation systems, and knowledge and socio-economic spillovers. This approach allows us to discriminate between the influence of internal factors and external knowledge and institutional flows on regional economic growth. The empirical results highlight how the complex interaction between local and external research, on the one hand, with local and external socio-economic and institutional conditions, on the other, shapes the innovation capacity of every region. They also indicate the importance of proximity for the transmission of economically productive knowledge, as spillovers are affected by strong distance decay effects. I+D, 'spillovers', sistemas de innovación y la génesis del crecimiento regional en EuropaLa investigación sobre el impacto de la innovación sobre el desempeño económico en Europa ha seguido fundamentalmente tres enfoques: a) el análisis del vínculo entre la inversión en I+D, patentes y crecimiento económico; b) el estudio de la existencia y eficacia de sistemas de innovación regionales y c) el examen de la difusión geográfica del conocimiento (spillovers). A pesar de su complementariedad, estos enfoques apenas se han combinado. La presencia de barreras metodológicas y operacionales ha minado cualquier posibilidad de interacción. En este artículo nuestra intención es cubrir este hueco en la literatura, combinando en un modelo los enfoques basados I+D, spillovers y sistemas de innovación. Esto se realiza mediante un análisis de regresión múltiple que incluye variables de inversión en I+D, componentes de los sistemas de innovación regional y spillovers de conocimiento y de carácter socioeconómico. Este enfoque nos permite discriminar entre la influencia de los factores internos y los flujos externos de conocimiento e institucionales sobre el crecimiento económico. Los resultados empíricos subrayan cómo la interacción entre la investigación local y la realizada en otros espacios, por un lado, con las condiciones socioeconómicas e institucionales tanto en el ámbito local como en otras áreas, por otro, influye en la capacidad innovativa de cada región. Los resultados también ponen de manifiesto la importancia de la cercanía geográfica en la transmisión del conocimiento productivo, ya que la e...

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Regional economic divergence has become a threat to economic progress, social cohesion and political stability in Europe. Market processes and policies that are supposed to spread prosperity and opportunity are no longer sufficiently effective. The evidence points to the existence of several different modes of regional economic performance in Europe, responding to different development challenges and opportunities. Both mainstream and heterodox theories have gaps in their ability to explain the existence of these different regional trajectories and the weakness of the convergence processes among them. Therefore, a different approach is required, one that strengthens Europe's strongest regions but develops new approaches to promote opportunity in industrial declining and less-developed regions. There is ample new theory and evidence to support such an approach, which we have labelled 'place-sensitive distributed development policy'.

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