Why Do Some Regions in Europe Have Higher Quality of Government?

Abstract

While most of the quantitative literature on quality of government involving European countries has focused on national differences, sub-national variation has been neglected, mainly due to the lack of data. This paper explores sub-national divergences in quality of government (understood as control of corruption, impartial treatment of citizens and government effectiveness) in three major policy areas (law enforcement, health and education) for more than 70 European regions. We address the question of why regions which share so many formal institutions (e.g. Northern and Southern Italy) do diverge so much in quality of government. We propose two hypotheses to explain such variation. First, similar to recent political economy literature, the paper underlines the importance of informal institutions historically transmitted. Yet, unlike this scholarship, the paper argues that it is not different cultural values (e.g. “generalized trust”) what explains regional path dependencies, but the persistence of patrimonial clientelistic networks created in those regions with historically unconstrained rulers. Second, we test the impact of contemporary political institutions that represent the level to which governments regions share power. The empirical analysis shows strong evidence for our first hypothesis; that those regions that constrained executives’ attempts to build clientelistic networks during the 17th-19th centuries exhibit significantly higher levels of quality of government today, controlling for standard political, cultural and socio-economic indicators.