Innovation Policy and Economic Development in Peripheral Regions in the Context of Electoral Institutions

Pijus Krūminas

Abstract


Although studies show that innovation policy should be adjusted based on the types of specific regions, it seems that governments are not keen to pursue such selective policies. The article advances a view that depending on how the government is elected (proportional vs. majoritarian rules) will have an impact on its approach to regional innovation policy. More specifically, majoritarian electoral systems provide incentives to overinvest in R&D in more peripheral regions, as this may be more beneficial for re-election and that under such systems R&D spending is less proportionally divided among regions than under proportional representation systems. Preliminary analysis of empirical data provides some support for the hypotheses and the model, but due to difficulties in measurement and low availability of data, the results are not robust. The study could be enhanced by empirically estimating the link between the intensity of innovation policy in peripheral regions and their development in a single model.

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