The Impact of EU Structural Funds on Regional Disparities within Member States

Abstract

We examine the impact of structural and cohesion funds on regional disparities within EU countries over the period 1995^2006. We find that structural funds have reduced regional disparities over this period. Our empirical estimates also suggest that the effect of structural funds on regional disparities is potentially reversed above some level of transfer intensity (approximately 1.6% of country gross domestic product). This has implications for the desirable allocation of the funds across countries especially since, in the current programming period (2007^13), all the new member states of the Union except for Cyprus and Malta have a transfer intensity which exceeds this threshold.

Structural Funds and European Regional Growth: Comparison of Effects among Different Programming Periods

“…From a different approach and at the national level, Kyriacou and Roca-Sagalés (2012) show that Structural and Cohesion Funds contributed to decrease regional disparities within EU-Members during the programming periods 1994-1999 and 2000-2006. Therefore, despite the wide diversity of studies about the impact of Structural Funds on regional growth, only a few consider the differentiated effects between programming periods. The focus has been put mainly on the effects of the EU financial transfers over growth, rather than on improvements in the efficiency on the application of such transfers.…”

“…Moreover, Kyriacou and Roca-Sagalés (2012) In the last column (18), the quadratic term for the Funds indicates us that its impact over growth is positive up to the limit share of 3% of GDP. For higher shares the impact of the Funds turns out to be negative.…”

The Impact of Institutional Quality and Efficient Cohesion Investments on Economic Growth Evidence from Italian Regions

“…This choice helped us in two different ways: (i) it reduced the proportion of infrastructural investments that are mainly managed through NOPs, and that produce economic returns on longer terms [21]; (ii) it reduced the influence of the national government, considering that ROPs reflect the independence of regions that select their priorities and financial instruments.…”

“…Among the fiscal policy instruments available to European regions, the investments by Structural and Cohesion funds are nowadays the main ones [21]. They are the major EU budget heading, featuring an increasing trend: in the 2007-2013 programming period, 278 billion euro had been allocated [22]; while, in the 2014-2020 planning, the share reached 367 billion euro, moving from 28% to 34% of the total EU budget [23].…”

New directions in economic development: Localist policy discourses and the Localism Act

“…Despite European cohesion policy that seeks to accelerate convergence between 'lagging regions' and the rest of the EU (Kyriacou and Roca-Sagalés, 2012), the more traditional redistributive approach relying on subsidies to address need has been replaced by a neoliberal investment approach intended to develop 'assets', exploit opportunities and incentivise growth. In England -along with other nations -the private sector has been thrust to the forefront of economic development strategies as a variegated neoliberal orthodoxy prevails (Brenner et al, 2010).…”