This paper provides insights on the potential macroeconomic impact of the European innovation policy for Smart Specialisation governance. We use original empirical data on the governance of the policy, funded through a dedicated financial envelope of the 2014-2020 EU cohesion policy, in a spatial macroeconomic modelling framework capable of gauging the general equilibrium effects of varying degrees of governance quality. Our contribution aims at narrowing the gap between the abstraction of ex-ante impact assessment exercises based on macroeconomic simulations and the reality of how policy interventions may take place. By using data for all Italian NUTS 2 regions, we find that the measured quality of Smart Specialisation governance could increase the pure investment-related impact of the policy by 23 to almost 40 percent. At the same time, we estimate that further potential GDP gains – in the order of an additional 40-50 percent over what was achieved with current levels of governance – would not materialize because of the comparatively low quality of governance in some regions.