Fiscal decentralisation, efficiency, and growth

Much of the recent worldwide trend towards devolution has been driven by the belief that fiscal decentralization is likely to have a positive effect on government efficiency and economic growth. It is generally assumed that the transfer of powers and resources to lower tiers of government allows for a better matching of public policies to local needs and thus for a better allocation of resources. These factors, in turn, are expected to lead to an improvement in regional economic performance, if subnational authorities shift resources from current to capital expenditures in search of a better response to local needs. This paper tests these assumptions empirically by analysing the evolution of subnational expenditure categories and regional growth in Germany, India, Mexico, Spain, and the USA. We find that, contrary to expectations, decentralisation has coincided in the sample countries with a relative increase in current expenditures at the expense of capital expenditures, which has been associated with lower levels of economic growth in countries where devolution has been driven from above (India and Mexico), but not in those where it has been driven from below (Spain). The paper hypothesises that the differences in legitimacy between the central or federal government and subnational governments in top-down and bottom-up processes of devolution may be at the origin of the diverse capacity to deliver greater allocative and productive efficiency and, eventually, greater economic growth by devolved governments.devolution; fiscal decentralisation; subnational expenditure; economic growth; Germany; India; Mexico; Spain; United States

Change in urban concentration and economic growth

The paper investigates (1) the evolution of urban concentration from 1985 to 2010 in 68 countries around the world and (2) the extent to which the degree of urban concentration affects national economic growth. It aims to overcome the limitations of existing empirical literature by building a new urban population dataset that allows the construction of a set of Herfindahl-Hirschman-Indices which capture a country’s urban structure in a more nuanced way than the indicators used hitherto. We find that, contrary to the general perception, urban concentration levels have on average decreased or remained stable (depending on indicator). However, these averages camouflage diverging trends across countries. The results of the econometric analysis suggest that there is no uniform relationship between urban concentration and economic growth. Urban concentration is beneficial for economic growth in high-income countries, while this effect does not hold for developing countries. The results differ from previous analyses that generally underscore the benefits of urban concentration at low levels of economic development. The results are robust to accounting for reverse causality through IV analysis, using exogenous geographic factors as instruments

Towards economically dynamic Special Economic Zones in emerging countries

Despite a massive recent proliferation of Special Economic Zones (SEZs), there is virtually no quantitative research on what drives their dynamism. The aim of this paper is to address this gap and analyse the factors influencing SEZ performance – proxied by economic growth – in emerging countries. The paper relies on two novel datasets, using night-lights data to proxy for SEZ performance and containing a wide range of SEZ policy variables and characteristics across a large number of countries. The main results of the analysis indicate that a) zone growth is difficult to sustain over time; that b) trying to upgrade the technological component or value-added of the economy through SEZ policies is often challenging; and that c) zone size matters: larger zones have an advantage in terms of growth potential. Furthermore, country context significantly determines SEZ performance. Firms look for low cost locations, but in close proximity to large cities. Proximity to large markets as well as pre-existing industrialization also increase SEZ performance. In contrast, incentives and other program specific variables are highly context-specific and not structurally correlated with SEZ performance

Average city size and economic growth

This paper examines the link between average city size and aggregate economic growth in a total of 114 countries for the period between 1960 and 2010. The analysis – which includes pooled two-stage least-squares (2SLS), panel data analysis, system generalized method-of-moments (GMM) estimator, and an instrumental variable (IV) approach – finds that, in contrast to the prevailing view, there is no universal positive relationship between average city size and economic growth and that the results vary between high-income and developing countries. In high-income countries, there is consistent evidence of a positive albeit decreasing link between city size and economic growth. In contrast, the relationship does not hold for developing countries, for which most of the coefficients display insignificant results or point towards a negative connection between both factors

The challenge of developing Special Economic Zones in Africa: evidence and lessons learnt

Special economic zones (SEZs) are mushrooming across the developing world. Increasingly, policymakers resort to zones with the aim of turning around their countries’ economic fortunes. Zones are expected to deliver greater innovation, exports, knowledge and technological spillovers. Yet, little is known about the state of play of SEZs in Africa, where almost half of SEZ programmes are less than 10 years old. The recent proliferation of SEZs in the continent has rendered the need to ensure that SEZs deliver on their objectives more impelling, given the often non-negligible opportunity costs associated with SEZ development. This article addresses this knowledge gap and sheds light on African SEZ practices. The analysis of a novel dataset highlights that (i) African SEZs are on a steep upward trend and are changing in nature; (ii) the ability of African SEZs to attract industrial activity, proxied by firms, and generate employment remains limited; and (iii) African SEZ governance policies (over)rely on fiscal incentives and performance requirements. Case studies from Ethiopia, Morocco and South Africa suggest that those African SEZ programmes that have a well-targeted strategic focus, promote institutional collaboration and take a proactive approach to create linkages with the local economy are more likely to succeed

eu regional policy effectiveness and the role of territorial capital

The present chapter reviews the recent studies of the group of regional and urban economics on the impact of the European Union regional policy on regional development. In particular, the focus of the research program is on the identification of the mechanisms through which the local territorial characteristics mediate the effect of public investments. Results show a strong relationship between the territorial capital of regions and the effectiveness of the EU regional policy. This evidence conveys relevant implications for policy makers. In particular, it suggests that regions should invest in those assets that are complementary to the ones which they already have, in order to build a balanced economic system

Building consensus: shifting strategies in the territorial targeting of Turkey's public transport investment

© 2019, © 2019 Regional Studies Association. A growing amount of research explores how the allocation of regional development monies follows electoral reasons. Yet, the existing literature on distributive politics provides different and contrasting expectations on which geographical areas will be targeted. The paper focuses on proportional representation (PR) systems. While in such settings governments have incentives to target core districts and punish foes, it is suggested that when incumbents attempt to build a state–party image they may broaden the territorial allocation of benefits and even target opposition out-groups. The paper exploits data on Turkey's public transport investment for the period 2003–14 and in-depth interviews to provide results in support of the hypothesis.Harvard Emirates Leadership Initiative Fellowshi

Smart cities, social media platforms and security: online content regulation as a site of controversy and conflict

Abstract Smart, technologically managed city-regions are one of the main characteristics of the contemporary world. Since the attack to the Charlie Hebdo offices, city-regions and social media digital technologies have increasingly been changing the definition of 'territory of security' and 'security governance'. What are the characteristics of the security architecture created by the interaction of smart city-regions and digital technologies? Drawing from Actor-Network theory and Science and Technology Studies, we provide an empirical account of the shape of this new territory, by presenting a study of the controversy concerning security and social media in UK, the role of cities in this changed security space, and how social sciences can help better understand and respond to the opportunities and threats of smart cities

Study of pallial neurogenesis in shark embryos and the evolutionary origin of the subventricular zone

The dorsal part of the developing telencephalon is one of the brain areas that has suffered most drastic changes throughout vertebrate evolution. Its evolutionary increase in complexity was thought to be partly achieved by the appearance of a new neurogenic niche in the embryonic subventricular zone (SVZ). Here, a new kind of amplifying progenitors (basal progenitors) expressing Tbr2, undergo a second round of divisions, which is believed to have contributed to the expansion of the neocortex. Accordingly, the existence of a pallial SVZ has been classically considered exclusive of mammals. However, the lack of studies in ancient vertebrates precludes any clear conclusion about the evolutionary origin of the SVZ and the neurogenic mechanisms that rule pallial development. In this work, we explore pallial neurogenesis in a basal vertebrate, the shark Scyliorhinus canicula, through the study of the expression patterns of several neurogenic markers. We found that apical progenitors and radial migration are present in sharks, and therefore, their presence must be highly conserved throughout evolution. Surprisingly, we detected a subventricular band of ScTbr2-expressing cells, some of which also expressed mitotic markers, indicating that the existence of basal progenitors should be considered an ancestral condition rather than a novelty of mammals or amniotes. Finally, we report that the transcriptional program for the specification of glutamatergic pallial cells (Pax6, Tbr2, NeuroD, Tbr1) is also present in sharks. However, the segregation of these markers into different cell types is not clear yet, which may be linked to the lack of layering in anamniotesThis work was supported by the Spanish Ministerio de Economía y Competitividad-FEDER (BFU2014-5863-1P)S