I know this is an old question but since I had the same problem and couldn't find the answer...
I had all of the correct scripts included, checked that the links were valid etc and it still wasn't working.
I then moved the script references to be directly above the code that calls .draggable and.. it works perfectly.
<link rel="stylesheet" href="https://code.jquery.com/ui/1.11.4/themes/smoothness/jquery-ui.min.css"/>
<script type="text/javascript" src="https://code.jquery.com/jquery-1.12.4.min.js" />
<script type="text/javascript" src="https://code.jquery.com/ui/1.12.1/jquery-ui.min.js" />
<script type="text/javascript">
$(function () {
$(".regionStyle li").draggable();
$(".regionStyle").droppable({
drop: function (event, ui) {
$(this)
.addClass("ui-state-highlight")
.find("p")
.html("Item Dropped!");
}
});
});