Quality of government and regional resilience in the European Union. Evidence from the Great Recession

Abstract

This paper examines the relationship between quality of government and regional resilience in the European Union during the Great Recession. The results show that the quality of government is an important factor when shaping the regional reaction to the crisis. Our estimates reveal that higher quality of government is associated with greater regional resilience over the Great Recession. This is partly due to the role played in this context by spatial spillovers induced by the quality of government in neighbouring regions. The observed link between governance and regional resilience is robust to the inclusion in the analysis of different explanatory variables that may affect both government quality and regional resilience. Likewise, our findings do not depend on the specific dimension of governance considered, the estimation method or the econometric specification employed to capture the nature of spatial spillovers.

Well‐being in European regions: Does government quality matter?

“…For the rest of the dimensions, large differences are found in the size of the QoG coefficient. The largest impact is seen in the jobs dimension (0.137), indicating that higher QoG helps create a more dynamic job market able to overcome negative tendencies, thereby making regions more resilient (Ezcurra & Rios, ). The impact on education and income, two of the pillars of the HDI index, is also non‐negligible, although we find larger effects for social features such as civic engagement and community, suggesting that people tend to participate more actively in the community under a reliable institutional setting.…”

“…Consequently, a more dynamic regional economy would be accompanied by lower levels of unemployment, higher income and a wider array of available services for citizens. Likewise, negative shocks to the labour market can be more easily overcome with a strong institutional system, as the available resources can be better allocated to mitigate negative dynamics (Ezcurra & Rios, ).…”

Regional disparities in economic resilience in the European Union across the urban–rural divide

“…The ESPON multimodal accessibility indicator, which integrates the accessibility by road, rail and air, is based on the population in NUTS-3 regions and the travel time to reach them (ESPON, 2009). The economic resilience of a region is also expected to be associated with the resilience of nearby regions (Ezcurra & Rios, 2019;Pontarollo & Serpieri, 2018). We used the number of resilient neighbour regions, within a 100-km radius between the centroids of the regions, to estimate the effect of spatial spillovers between neighbouring regions.…”

“…We measured the spatial dependence in the distribution of regional employment resilience with the global Moran's I statistic (Ezcurra & Rios, 2019;Pontarollo & Serpieri, 2018), using ArcGIS 10.1 (ESRI, USA). We selected a Euclidian distance threshold of 100 km between the centroids of the regions and used a row-standardized spatial weight matrix for the analysis.…”

Location matters: A spatial econometric analysis of regional resilience in the European Union

“…The authors argue that technological similarity among industries increase resilience to an economic shock because skills, capabilities, and technologies can be swiftly re‐allocated across industries, thereby improving regional capacity to respond to a shock. Assessing the role of institutions, Ezcurra and Rios () examine the relationship between the quality of government and regional resilience in the EU during the crisis. The authors estimate that an increased quality of government is associated to better regional labour market performance, in part because of the spatial spillover effects induced by higher government quality.…”