Effective growth policymaking: Estimating provincial territorial development potentials

This paper follows the view that for the implementation of a successful growth policy, differentials among local areas require both a deepened awareness of the state of place and a multidimensional measure of inequalities—by considering both intangible and tangible features of the development. To achieve an effective growth policymaking, an innovative approach is proposed. The approach consists of two main steps. Firstly, the definition of an index for assessing the potential of local development—designed by using Principal Component Analysis model on a sample of 110 Italian provinces—allows vertical comparison among the observation in order to evaluate the level of reached development; besides two further sub-indexes offer specific indication about the multidimensionality of the analysed phenomenon. Secondly, by using a Sen Index, the measurement of the distance between the position in the ranking of the observation and a calculated threshold offers punctual information on the weights that could be assigned to the provinces for a financial resource programming. The findings of an empirical investigation reveal that the proposed approach has adequate to estimating provincial territorial development potentials.