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Fertile Soil for Structural Funds?A Panel Data Analysis of the Conditional Effectiveness of European Cohesion Policy

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Author Info
Sjef Ederveen
Henri L.F. Groot
Richard Nahuis

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Abstract

Structural Funds are the most intensively used policy instrument by the European Union to promote economic growth in its member states and to speed up the process of convergence. This paper empirically explores the effectiveness of European Structural Funds by means of a panel data analysis for 13 countries in the European Union. We show that - on average - Structural Funds are ineffective. For countries with a 'proper' institutional framework, however, Structural Funds are effective. The latter result is obtained for a wide range of conditioning variables, such as openness, institutional quality, corruption and indicators for good governance. It is robust to a wide range of robustness tests. Copyright 2006 Blackwell Publishing Ltd..

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File URL: http://www.blackwell-synergy.com/links/doi/10.1111/j.1467-6435.2006.00318.x
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Publisher Info
Article provided by Blackwell Publishing in its journal Kyklos.

Volume (Year): 59 (2006)
Issue (Month): 1 (02)
Pages: 17-42
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Handle: RePEc:bla:kyklos:v:59:y:2006:i:1:p:17-42

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Sjed Ederveen & Joeri Gorter & Ruud de Mooij & Richard Nahuis, 2003. "Funds and Games: The Economics of European Cohesion Policy," Occasional Papers 03, European Network of Economic Policy Research Institutes. [Downloadable!]
  2. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Blackwell Publishing, vol. 58(2), pages 277-97, April. [Downloadable!] (restricted)
  3. Hall, Robert E & Jones, Charles I, 1997. "Levels of Economic Activity across Countries," American Economic Review, American Economic Association, vol. 87(2), pages 173-77, May. [Downloadable!] (restricted)
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  4. Bond, Stephen Roy & Hoeffler, Anke & Temple, Jonathan, 2001. "GMM Estimation of Empirical Growth Models," CEPR Discussion Papers 3048, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  5. Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 681-712, August. [Downloadable!] (restricted)
  6. Jeffrey D. Sachs & Andrew Warner, 1995. "Economic Reform and the Process of Global Integration," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1995-1), pages 1-118. [Downloadable!]
  7. Rafael Doménech & Antonio Maudes & Juan Varela, 2000. "Fiscal flows in Europe: The redistributive effects of the EU budget," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 136(4), pages 631-656, December. [Downloadable!] (restricted)
  8. Blundell, R. & Bond, S., 1995. "Initial Conditions and Moment Restrictions in Dynamic Panel Data Models," Economics Papers 104, Economics Group, Nuffield College, University of Oxford.
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  9. Murphy, Kevin M & Shleifer, Andrei & Vishny, Robert W, 1991. "The Allocation of Talent: Implications for Growth," The Quarterly Journal of Economics, MIT Press, vol. 106(2), pages 503-30, May. [Downloadable!] (restricted)
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  10. Jeffrey Sachs & Andrew Warner, 1995. "Economic Reform and the Progress of Global Integration," Harvard Institute of Economic Research Working Papers 1733, Harvard - Institute of Economic Research.
  11. Islam, Nazrul, 1995. "Growth Empirics: A Panel Data Approach," The Quarterly Journal of Economics, MIT Press, vol. 110(4), pages 1127-70, November. [Downloadable!] (restricted)
  12. Burnside, Craig & Dollar, David, 1997. "Aid, policies, and growth," Policy Research Working Paper Series 1777, The World Bank. [Downloadable!]
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  13. Jesús Crespo-Cuaresma & Maria Antoinette Dimitz & Doris Ritzberger-Grünwald, 2002. "Growth, Convergence and EU Membership," Working Papers 62, Oesterreichische Nationalbank (Austrian Central Bank). [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Jonathan Jones & Colin Wren, 2008. "FDI Location Across British Regions and Inward Investment Policy," SERC Discussion Papers 0013, Spatial Economics Research Centre, LSE. [Downloadable!]
  2. Mohl, Philipp & Hagen, Tobias, 2008. "Does EU Cohesion Policy Promote Growth? Evidence from Regional Data and Alternative Econometric Approaches," ZEW Discussion Papers 08-086, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  3. Kjetil Bjorvatn & Nicola Daniele Coniglio, 2004. "Regional Policy and rent-seeking," ERSA conference papers ersa04p162, European Regional Science Association. [Downloadable!]
  4. GUILLAIN, Rachel & DALL'ERBA, Sandy & LE GALLO, Julie, 2007. "Politiques de développement et croissance régionale en Europe : le rôle des rendements croissants et des dépendances spatiales," LEG - Document de travail - Economie 2007-02, LEG, Laboratoire d'Economie et de Gestion, CNRS UMR 5118, Université de Bourgogne. [Downloadable!]
  5. Ville Kaitila, 2004. "The Factor Intensity of Accession and EU15 Countries´ Comparative Advantage in the Internal Market," Discussion Papers 925, The Research Institute of the Finnish Economy. [Downloadable!]
  6. Davide Fiaschi, Andrea Mario Lavezzi and Angela Parenti, 2009. "Productivity Dynamics across European Regions: the Impact of Structural and Cohesion Funds," Discussion Papers 2009/84, Dipartimento di Scienze Economiche (DSE), University of Pisa, Pisa, Italy. [Downloadable!]
  7. Cornelius Baehr, 2006. "How Does Sub-National Autonomy Affect the Effectiveness of Structural Funds?," ERSA conference papers ersa06p470, European Regional Science Association. [Downloadable!]
    Other versions:
  8. Boldrin, Michele & Canova, Fabio, 2003. "Regional Policies and EU Enlargement," CEPR Discussion Papers 3744, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  9. T. Dhont & F. Heylen, 2006. "Employment and growth in Europe and the US - The role of fiscal policy composition," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 06/420, Ghent University, Faculty of Economics and Business Administration. [Downloadable!]
    Other versions:
  10. Martin Falk & Franz Sinabell, 2008. "The Effectiveness of Objective 1 Structural Funds in the EU 15: New Empirical Evidence from NUTS 3 Regions," WIFO Working Papers 310, WIFO. [Downloadable!]
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