Beyond the EU Structural Funds’ Absorption Rate: How Do Regions Really Perform?

Abstract

<jats:p>Although the EU structural funds aim to alleviate disparities through supporting regional development, their impact on local economies and societies is considered as uneven. As existing studies explore the absorption rate of the EU share of contribution as a point-in-time indicator at the end of the policy cycle, evidence about regional co-finance and the factors dynamically affecting absorption performance is lacking. To that end, this paper aims to provide a new longitudinal investigation of the absorption time series and develop an original indicator, supported by a statistical error analysis, for offering a transparent view of the total funds’ absorption. The analysis highlights that undesired regional strategies due to low administrative capacity may increase the absorption rate, though without supporting regional growth. The proposed approach could further facilitate the equitable allocation of political accountability regarding the structural funds’ absorption to the EU and the regions. Overall, it is anticipated that this research will support the EU in monitoring actual regional performance for prompting local managing authorities to improve their administrative capacity.</jats:p>

Perspectives and Impacts of Accelerating the European Funds Absorption in Romanian Economy

“…al., 2020) related to the absorption capacity of funds, which we can divide into five categories:  obstacles related to the level of information, knowledge and skills of the population;  obstacles regarding the way of design European programs;  obstacles coming from institutional structures;  obstacles related to the institutional framework;  obstacles related to the wider socio-economic environment. Source: Authors' development based on Apostolopoulos et al, 2020. The multitude and diversity of factors (obstacles) that hinder the absorption process is obviously a broad topic of discussion (Aivazidou, 2020;Orboi, et al, 2016;Patru, 2008;Zaman and Cristea, 2011) and depends very much on the specificity of each country. As they are described in Figure no.…”

Decision‐making traps behind low regional absorption of Cohesion Policy funds

“…These LMAs were specifically selected because both regions belong to the same country, allowing to assume that they operate under similar legislative and national contexts that render comparisons possible, while they have been already successfully used as comparative case studies in the literature about CP (Aiello et al, 2019; Aivazidou et al, 2020). In general, Italian regions have often been compared to each other to gain critical and general insights on regional and CP performances (Domorenok et al, 2021; Milio, 2007; Putnam, 1993) as they differ significantly in terms of socioeconomic development and cultural contexts but, at the same time, share common regulatory and formal institutions (Italy is a nonfederal country), offering a promising environment to conduct field studies and comparisons.…”

“…For completeness, we further report the data over time about the European Regional Development Funds (ERDF) in the two regions in Appendix C. Similarly to ESF, also ERDF absorption in Calabria and Emilia-Romagna have contrasting performances. However, given the even more extensive use of cofinance reduction and retrospective projects by the Calabrian LMA (Corte dei Conti, 2017), its poor performance is not easily detectable in the graphs without a detailed deconstruction of the inflating effects of the two strategies (Aivazidou et al, 2020). Therefore, although, for conciseness reasons, we focus on the ESF funds' analysis, the insights gained further apply to the implementation of ERDF funds.…”

“…Relevant literature and official reports highlight the region for its low CP absorption rates and base the causes of this “absorption incapacity” on the lack of LMA administrative capacity. As several sources report, the region's scarce absorption performance over the years has emerged as a repeated problem (Aivazidou et al, 2020; Corte dei Conti, 2017; Gandolfo, 2014; Leonardi, 2006; Milio, 2007). On the other hand, Emilia‐Romagna region, in Central Italy, typically shows a high level of absorption (Aivazidou et al, 2020; Arbolino et al, 2016; Corte dei Conti, 2017; Hooghe, 1998).…”

“…As several sources report, the region's scarce absorption performance over the years has emerged as a repeated problem (Aivazidou et al, 2020; Corte dei Conti, 2017; Gandolfo, 2014; Leonardi, 2006; Milio, 2007). On the other hand, Emilia‐Romagna region, in Central Italy, typically shows a high level of absorption (Aivazidou et al, 2020; Arbolino et al, 2016; Corte dei Conti, 2017; Hooghe, 1998). Therefore, Calabria was selected as a case study because it manifests chronic absorption problems, while Emilia‐Romagna was used as a reference case to compare and assess the validity of the insights gained.…”