Does administrative capacity matter? The absorption of the European Fund for the integration of migrants

Empirical evidence of the relationship between administrative capacity and the use of EU funds is plentiful. According to this strand in literature, the complexity of spending rules is key in explaining the implementation gap. What would happen should administrative requirements be relaxed? This paper looks into the implementation of the European Fund for the Integration of third country nationals (EIF), a fund with simpler spending rules and yet a higher rate of unused money. Adapting the hypotheses put forth in absorption literature to the specifics of the EIF, I confront capacity-based explanations to (under-explored) preference-based ones in a comparative fashion. Even when spending EU money is easier, strong support is found for capacity explanans and little for preferences. Even so, administrative capacity appears to be only one factor amongst many, with financial capacity and decentralization playing strong roles too. Empirical evidence is drawn from the application of time-series cross-section methods to an original dataset.