Policy evaluation using multi-level panel designs: Institutional capacity building among Polish regional zones administrations

The research investigates the problem of designing policies to combat emerging employment differences across Poland’s regions during transition to a market economic system. Poland has relied on alleviating problems of lacking local ‘captains of regional development’ by a design of zones administrations that cut across traditional regional boundaries and governance systems.

The questions addressed here are whether the individual zones administrations matter and if so, how exactly do they matter? Do they matter because of the tiered tax incentive structure offered or due to the services and institutional building efforts of the new alternative and footloose local zones administrations?

Overall it is concluded that zones administrations matter both because of the impact they have on the intensive (reeking in large projects) and extensive margins (attracting new investors) of employment creation. There are great differences in these capacities across the zones. The intensive margin is found to be declining over time across almost all the special economic zones. However, this is not necessarily a bad sign as the economic model behind the estimations suggest as it may be a sign of division of labour or specialization in the zones.
What seems to matter most in the dynamic perspective is whether the zones are able to increase their extensive margin over time, e.g. did any of the zones generate a snow balling type of effect in their ability to attract investors? Again are there differences across zones in their ability to attract investors. Only two zones were found capable of lifting their extensive margins over time.