One or many Cohesion Policies of the European Union? On the differential economic impacts of Cohesion Policy across member states

Abstract

To what extent do regions in different member states of the European Union benefit from Cohesion Policy? A spatial regression discontinuity design approach offers distinct but fully comparable estimates of regional impacts for each individual member state. Cohesion Policy has a positive European Union-wide impact on regional growth and employment. However, a large part of the growth bonus is concentrated in Germany, while impacts on employment are confined to the UK. The picture in Southern Europe is less rosy. In Italy, positive impacts on employment do not survive the Great Recession, while in Spain economic growth benefits are limited to the recovery period.

Some Causal Effects of an Industrial Policy

“…Figure 3 shows changes in employment for areas whose support levels were predicted to increase because of the policy rule change in 2000-i.e., a discrete version of our instrumental variable-compared to areas where support levels were predicted to decrease. 21 Since this is for manufacturing, a sector in long-run decline, both lines are on a downward trend, but there is no sign of significant differential trends prior to the 2000 policy change. The figure clearly suggests that manufacturing employment fell significantly less in areas where predicted eligibility for investment subsidies increased after 2000 compared to those areas where predicted eligibility fell.…”

“…For example, using the estimates from the last two columns of Table 3 (instead of our baseline estimates using the first 2 columns) generated a coefficient (standard error) on the IV estimates in the employment equation of 0.653 (0.322) compared to 0.953 (0.260) in the baseline estimates of column 4 in Table 4, panel A. 21 Recall that our instrument is derived from the change (due to rule changes) in predicted support levels. There are no areas where predicted support levels stay precisely constant because the probabilities are continuous.…”

Portugal 2020: An Effective Policy Platform to Promote Sustainable Territorial Development?

“…This controversy stems from evidence of its positive effects on territorial development in less developed regions [11][12][13][14], and also from noticeable doubts on its overall effectiveness [15][16][17]. Accounting for more than a third of the EU budget, EU Cohesion Policy has been a cornerstone of EU development policy [18]. It has also served as a concrete tool to implement ongoing EU development strategy visions, from place-based [19], multilevel governance [20], and smart specialization [21] narratives.…”

Regional needs, regional targeting and regional growth: an assessment of EU Cohesion Policy in UK regions

“…1 The evidence produced by the broader European literature is also of limited help, as findings on the economic effects of the policy are not fully conclusive (cf. Dall'erba & Le Gallo, 2008;Becker et al, 2010Becker et al, , 2012Bouayad-Agha et al, 2013;Cerqua & Pellegrini, 2017) and seem to vary across national and regional contexts (Crescenzi & Giua, 2018;Bachtrögler et al, 2018). 1 Less recent studies often had either a narrower programme-specific focus (Armstrong & Wells, 2006) or focused on issues of governance and institutional fit (Gripaios & Bishop, 2006).…”