Can regional policies accelerate the convergence path of dualistic economic growth
in a single country, offsetting market failures and making growth transmission channels more
efficient? A structural dynamic econometric model has been set up in order to account for these
changes. Three are the main sources of growth playing a role in this context: the 'neigh bourhood'
effect, the interaction between the economic environment and the agents' expectations, and the
policy impact on economic take-off. The evidence shows that policies strongly boost economic growth
of a local area and narrow the gap between the regions of a dual economy.
