Geography and regional economic growth: The high cost of deviating from nature

We analyze the role of nature and geography in determining economic and social outcomes. We propose a theoretical model relating geography and nature to economic growth, and examine that model using data from NUTS 2 European regions. By doing this, we identify the predictive power of first‐nature va...

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Bibliographic Details
Published inJournal of regional science Vol. 62; no. 2; pp. 360 - 388
Main Authors Albalate, Daniel, Bel, Germà, Mazaira‐Font, Ferran A.
Format Journal Article
LanguageEnglish
Published Heightstown Blackwell Publishers Inc 01.03.2022
Subjects
conditional convergence
Cost analysis
Economic analysis
Economic development
Economic growth
Economic models
Economic performance
Geography
growth
inequality
institutions
Nature
population
Population distribution
Regional development
Regional economic development
Social welfare
Welfare
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Summary:We analyze the role of nature and geography in determining economic and social outcomes. We propose a theoretical model relating geography and nature to economic growth, and examine that model using data from NUTS 2 European regions. By doing this, we identify the predictive power of first‐nature variables to explain regional population distribution. Then we analyze the effects of misadjustment between the actual and predicted distribution of populations on economic performance. Our results indicate that deviating from first‐nature outcomes has a significant negative effect on economic growth. The main policy implication emerging from our analysis is that strategies that harmonize with nature and geography yield better social welfare than those policies that conflict with them.
ISSN:0022-4146
1467-9787
DOI:10.1111/jors.12568