Convergence and Public Investment: Regional Policies Revisited

• Autores: Santiago Lago Peñas, Diego Martínez López
• Localización: XII Encuentro de Economía Pública. Evaluación de las Políticas Públicas: Palma de Mallorca. Los días 3 y 4 de febrero de 2005, 2005, pág. 53
• Idioma: inglés
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• Resumen

  • This paper aims to add new arguments upon the debate on the effectiveness of regional policies. We present an endogenous growth model with two regions where the crucial issue for removing regional disparities is public investment. When the model is checked using data from Spanish regions, we do not find evidence of convergence, in spite of the redistributive character of the regional allocation of public investment. Neither capital mobility, nor human capital accumulation, nor public R&D activities seem to have been an obstacle for convergence since the middle of the eighties. Therefore, thinking on a new approach for regional development seems to be required.