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Promoting investment in sustainable urban development with JESSICA: Outcomes of a new EU policy initiative

Author

Listed:
  • Michael Nadler

    (TU Dortmund University, Germany)

  • Claudia Nadler

    (RWTH Aachen University, Germany)

Abstract

Between 2007 and 2015, the European Commission invested €1.846 billion in a new policy initiative called JESSICA (Joint European Support for Sustainable Investment in City Areas). Since European cities in particular have perceived a shortage of investment dedicated to urban regeneration projects, JESSICA will finance more than 2000 higher risk projects through Urban Development Funds as a financial intermediary in order to create economic stimulus. Moreover, replacing traditional grant funding by revolving financial instruments (loans, guarantees and equity capital) is a central part of the ongoing reform of EU cohesion policy. The special challenge of JESSICA is to combine these financial engineering instruments with integrated urban planning issues in a sustainable fund model. However, it is not yet clear whether this new policy instrument is as effective as European decision-makers believe, because up to now there has been no evaluation available on how successful JESSICA has been in achieving its ambitious objectives. Our empirical analysis is the first one to cover the impact of this innovative EU initiative in all 28 EU member states by making outcomes of the policy change measurable in monetary terms. Since revolving financial engineering instruments are a central part of the Europe2020 strategy, we derive key success factors for sustainable urban finance and give recommendations to adjust the policy instrument in the current programming period as part of the ongoing process of a reformed EU cohesion policy.

Suggested Citation

  • Michael Nadler & Claudia Nadler, 2018. "Promoting investment in sustainable urban development with JESSICA: Outcomes of a new EU policy initiative," Urban Studies, Urban Studies Journal Limited, vol. 55(9), pages 1839-1858, July.
    • Handle: RePEc:sae:urbstu:v:55:y:2018:i:9:p:1839-1858
    DOI: 10.1177/0042098017702815
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    References listed on IDEAS

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    1. Salamon, Lester M., 2014. "New Frontiers of Philanthropy: A Guide to the New Tools and New Actors that Are Reshaping Global Philanthropy and Social Investing," OUP Catalogue, Oxford University Press, number 9780199357543.
    2. Tarmo Kalvet & Alf Vanags & Klaudijus Maniokas, 2012. "Financial engineering instruments: the way forward for cohesion policy support? Recent experience from the Baltic states," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 12(1), pages 5-22, July.
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