Towards an evolutionary perspective on institutions in economic geography

A long-standing body of literature has investigated the role of institutions for regional development. There is a tendency in the economic geography literature on institutional change to look at institutions as if they operate in isolation from each other. This paper proposes a systemic, evolutionary framework on institutional change that accounts for institutional complementarities. It presents an analytical framework that identifies revealed (instead of pre-defined) complementarities between institutions (institutional space), as well as between policies (policy space). This allows us to take up questions in economic geography that have not yet been fully addressed: (1) how institutional relatedness affects the ability of regions to diversify into new activities; (2) how such a framework on institutional complementarities sheds light on the directionality and feasibility of institutional change in territorial contexts; and (3) how this may contribute to a better understanding of how changes in regional innovation or mission-oriented policies may, or may not, become effective. Doing so, the paper aims to contribute to the further integration of institutions and policy in Evolutionary Economic Geography.