Should We Continue EU Cohesion Policy? The Dilemma of Uneven Development of Polish Regions

The European Union and the whole world are facing the problem of increasing income and wealth inequalities at the country and regional levels. Inequalities are a severe obstacle to sustainable and balanced growth. Politicians perceive this problem by trying to implement different types of development models. The cohesion policy is the European Union's response to the development differences between countries and regions. It is clearly defined that development has to be sustainable and inclusive, which is reflected in the objectives of all leading EU development strategies. The aim of this paper is (1) to examine how effective the EU cohesion policy is in reducing regional disparities (2) to assess that the main cause of regional disparities is the misallocation of human capital. The authors base their study on the regions of Poland, estimating the state of their human capital and innovation between 2004 and 2018. We examine the effectiveness of cohesion policy using functional data analysis—the Wilcoxon test, which was used for the first time for this type of issue. The current question is whether to help metropolises and large cities, which will entail the development of smaller units, or whether to try to increase the rate of development of smaller and economically weaker territorial units in the first place.