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There is a growing consensus across the social sciences that in order to explain divergent trajectories of economic development it is necessary to understand the political dynamics and the institutional environment in which they unfold. Bringing together insights from development studies, with new theoretical and empirical advances in Political Economy and Institutional and Evolutionary Economics, a growing body of work has sought to demonstrate these links, and move the debate about economic development away from a mechanistic understanding of society and individuals. However there is an emerging area of research that remains largely unexplored: the importance of the quality of governance at the sub-national level in the development paths of both regions and nations.