Social Innovation or Social Continuity? Discussing the Socioeconomic Determinants of Funding for Social Projects in Portugal

Abstract

This article discusses the distribution of projects financed by the Portugal Inovação Social programme. Two-part models (ordinary least squares and probit) and count models (negative binomial models) have been used for analysing several determinants suggested by various theories of funding allocation. The results showed that municipalities with stronger dynamics for the creation of small and medium-sized companies are Portuguese spaces with a larger number of funded projects and with greater funding from this initiative. Age (young people) and level of education (college graduates) have been found to be factors that determine the number of funded projects. There are also positive incentives for project financing arising from a greater proportion of college graduates in the municipality and from a business dynamic led by a greater number of small- and medium-sized companies. The population density and the percentage of women allowed a more complex discussion about the estimated effects in the studied dimensions. This study proves the existence of local and endogenous characteristics that explain the heterogenous pattern of social innovation across Portuguese municipalities, which demands a proper design of policies toward a more balanced distribution.