Acceso usuarios
Paul Caruana-Galizia
Institutions are the dominant explanation of differences in economic performance between countries. One important criticism of institutional explanations is that institutions are national and thus cannot account for sub-national (regional) economic inequality. Another is that institutions cannot be empirically measured in a satisfactory manner. This paper offers some preliminary ideas in response to both criticisms. First, regional-level constraints on the executive are modelled as spatial-decay functions of national-level constraints on the executive. Second, the efficiency of institutions in distributing goods is modelled as a production frontier function. The ideas are empirically tested on industrialising Europe, when economic differentials between and within nations were widening. In putting forward two novel methods of institutional measurement and focusing on sub-national units of observation, this paper chiefly contributes to the debate on institutional measurement. In its empirical test, it makes use of a novel dataset on literacy rates for 199 European regions of seven countries over three benchmark years.
