The Garden City as an Urban Paradigm for a Sustainable Economic Model: The Case of Albania in the Fourth Post-Communist Decade

Abstract

This paper examines the role of remittances in shaping regional development in Albania by integrating institutional, financial, and spatial factors within the Digital Garden City (DGC) framework. Using a panel dataset of 12 prefectures for the period 2010–2024, the study applies fixed-effects (FE), spatial Durbin (SDM), and dynamic Generalized Method of Moments (GMM) models to assess whether remittance inflows enhance regional productivity or contribute to economic dependence. The findings indicate that remittances, in isolation, exert a negative and statistically significant effect on regional GDP per capita, reflecting their predominantly consumption-oriented use. However, interaction effects with institutional quality, financial intermediation, and spatial diversification are positive and significant, suggesting that remittances foster growth only in contexts characterized by strong governance and balanced territorial structures. Spatial estimates further reveal positive spillover effects across adjacent regions, underscoring the importance of connectivity and polycentric planning. Overall, the results empirically support the DGC framework as a viable territorial and policy model for transforming migration-driven financial flows into productive, inclusive, and digitally enabled regional development. The study offers recommendations on advancing micro–Digital Garden Cities, strengthening transparent digital governance, and designing financial instruments that link remittances to sustainable regional investment.