Cohesion Policy in the European Union: Growth, Geography, Institutions

Abstract

Since the reform of the Structural Funds in 1989, the EU has made the principle of cohesion one of its key policies. Much of the language of European cohesion policy eschews the idea of trade-offs between efficiency and equity, suggesting it is possible to maximize overall growth while also achieving continuous convergence in outcomes and productivity across Europe's regions. Yet, given the rise in inter-regional disparities, it is unclear that cohesion policy has altered the pathway of development from what would have occurred in the absence of intervention. This article draws on geographical economics, institutionalist social science and endogenous growth theory, with the aim of providing a fresh look at cohesion policy. By highlighting a complex set of potential trade-offs and interrelations -overall growth and efficiency; inter-territorial equity; territorial democracy and governance capacities; and social equity within places -it revisits the rationale of cohesion policy, with particular attention to the geographical dynamics of economic development.

The long-run impact of human capital on innovation and economic development in the regions of Europe

“…This strategy should be appropriate and adapted to the specificities of the regional context. For example, Farole, Rodríguez-Pose, and Storper (2011) argue that cohesion policy is confronted with various risks. Among others, it can potentially make regions dependent on specific public subsidies, so that they are not able anymore to generate growth by their own means.…”

The Impact of Institutional Quality on Economic Performance: An Empirical Study of Turkey and 28 Countries in the European Union.

“…Acemoglu, Johnson and Robinson (2005), and Robinson and Acemoglu (2012) underlined that better institutional quality creates a favorable environment for economic growth. Farole, Rodríguez-Pose and Storper (2011) highlighted that poor institutions have a detrimental effect on economic growth since rent seeking behaviors may deter potential sources of growth in the form of better provision of public goods and attraction of high skills and technology. Similarly, Vijayaraghavan and Ward (2001) express that institutional capacity can have an effect on the performance of the economy through resource reallocation.…”

“…Moreover, the author argued that varying levels of institutional quality and competitiveness were determined to be a contributing factor that incapacitates the EU in its quest to have inclusive growth by all member states. Farole, Rodríguez-Pose and Storper (2011) also highlighted the persistence in institutional differences faced by some EU member states which makes them continue to experience lower economic growth rates regardless of the integration. They further stressed that institutions contribute to agglomeration of economic activities through attracting best human capital and investment needed in development.…”

“…While the quality of institutions and their level of credibility and predictability is essential in providing a strong basis to enhance economic growth, literature on its transmission mechanism as well as its effect on economic growth is inconclusive. According to Farole, Rodríguez-Pose and Storper (2011) new economic models suggest that countries experience different economic trajectory due to differences in the quality of their economic, political and social institutions. In view of this, it is necessary to have high quality institutions not as substitute for other discretion policies and economic reforms but as adopted complements.…”

Using Social Impact Assessment to Strengthen Community Resilience in Sustainable Rural Development in Mountain Areas

“…This applies to both policies which have an overt spatial dimension -termed "spatially aware" -and those which do not -sometimes termed "spatially blind". 46 For a survey of the literature see the Report Working Paper by Farole, T., Rodríguez-Pose, A. and Storper, M. (2009). 47 See OECD (2009b).…”