Polycentric development is a widely-used term both in academic research and in the normative agenda. However, its theoretical foundations and economic implications are still unknown and the concept of polycentricity still does not have a shared definition, or a shared measurement method. The aim of this paper is twofold. Firstly polycentricity is defined and measured at a NUTS 2 regional level, by comparing functional and morphological methods. Secondly, in the light of the role assigned to polycentric development in terms of policy, the paper investigates the relationships between the degree of regional polycentricity and the key economic variables of performance -namely competitiveness, social cohesion and environmental sustainability. The main finding was that functional and morphological methods led to similar results. In addition, a correlation was found between polycentricity and a more unequal income distribution and a higher level of productivity, especially when polycentricity was measured in functional terms. No stable correlations were found between polycentricity and measures of environmental sustainability, such as land consumption and greenhouse emissions.