Understanding regional development

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This book examines the effectiveness of costly redistributive measures by the European Union, specifically structural funding, in the context of Italian regional development. It highlights the contrasting socio-economic growth outcomes between the Center-North and Mezzogiorno regions, particularly in relation to Structural Fund allocations during the 1994-2000 and 2000-2006 periods. The findings reveal that performance outcomes do not align with funding patterns; the Mezzogiorno, despite receiving up to three times more funding than the Center-North, has not achieved comparable growth. This suggests the influence of non-financial factors on development. The author proposes a new model of regional absorption that integrates insights from absorption literature on administrative capacity and rent-seeking behavior with Douglass C. North's economic institutionalism, particularly his transaction cost theory. Applying this model to case studies of Tuscany and Sardinia demonstrates the importance of enhancing administrative capacity and reducing rent-seeking within regional institutions to lower transaction costs and improve the productive absorption of Structural Funds. The work effectively combines political and economic perspectives to address regional development challenges.