The main findings of the paper are the following. First, we find that there is significant variation in QoG across mainly four main cluster groups of states: the top performers are mostly
from the Scandinavian, Germanic and English speaking countries; a second group is largely formed by the Mediterranean countries, together with Estonia and Slovenia; the third group consists of most of the ‘new’ EU Member States plus, notably, Italy and Greece; and a fourth group includes the two newest Member States – Romania and Bulgaria. We find, however, that in several countries the QoG national-level data offers a highly distorted picture due to the presence of significant sub-national variations in QoG. Previous literature has pointed in that direction. For example, differences between Northern and Southern Italy are widely known thanks to several influential works (e.g. Putnam, 1993), and the divergences between Flanders and Wallonia in Belgium, as well as the provinces in Spain, are often debated. Yet such regional differences in QoG in these two countries – and several others – have not been quantified throughout the EU in a systematic
way. The most encompassing empirical studies of European regional differences (e.g. Tabellini, 2005) have mostly relied on income levels as proxies of the level of QoG in a region. The
data presented in this paper – despite its cross-sectional nature given that this is the first time this information on QoG is gathered – is thus a pioneering effort to corroborate for the
first time within-country QoG variations in most European Member States simultaneously.