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Bridging, not bonding, for regional growth | VOX, CEPR Policy Portal


Francesca Borgonovi, Elodie Andrieu
Social scientists have long recognised that economic growth is not just a function of physical or human capital, but also of the ability of the population to collaborate and exchange knowledge. Places where people trust each other and form dense informal and formal networks can sometimes prosper and grow well beyond expectations. Putnam  et al. (1993) classically explained differences in governance quality and prosperity between Northern and Southern Italy drawing on the stronger and sounder civic traditions of the North of the country. Later, Putnam argued that the erosion of social capital in the US represented a challenge for democracy and wellbeing (Putnam 2000). Various subsequent studies have shown that variations in social capital explain differences across regions (Beugelsdijk and Schaik 2005, (Storper 2013) and even in the spread of Covid-19 (Bartscher et al., 2020). It therefore comes as no surprise that the World Bank, the OECD ....

United States , Edward Banfield , Mancur Olson , R Dahl Fitjar , Richard Florida , T Van Schaik , European Statistical Office , Princeton University , World Bank , European Values Survey , Economic Development Quarterly , Tilburg University , European Social Survey , Harvard University , Harvard University Press , Foreign Affairs , Princeton University Press , Southern Italy , Western Europe , Eastern Europe , Moral Basis , Backward Society , European Journal , Political Economy , Social Capital , Harvard Economic Studies ,

Picking winners is for losers - Carolina Journal


When it comes to giving out business incentives, you won’t find North Carolina at the top of the list. Don’t worry that’s actually good news.
Incentives can be targeted tax breaks, loans, marketing subsidies, or direct grants. Politicians use them to try to get companies either to relocate or expand within their jurisdictions. Businesses accept them, naturally, and in a few cases incentives may even be decisive.
But, generally, economic incentives are a failed policy, based on the fundamentally flawed premise that politicians are capable of predicting which companies or industries are worth investing in.
Although it may get me thrown out of the cynical-columnist club to say this, politicians aren’t fools. Incentives don’t fail because most lawmakers or bureaucrats are dumb, or suckers, or corrupt. It’s just impossible for central planners to possess enough information, in real time, to make sensible investment decisions with taxpayer money. ....

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