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Structural Funds and Regional Convergence in Italy

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  • S. Loddo

Abstract

The lack of convergence across Italian Regions has been widely cited as an incontrovertible proof of failure of Cohesion policy. This paper aims to provide a twofold contribution to the debate on the effectiveness of Cohesion policies in Italy. Firstly, we provide an up-to-date view of convergence across Italian regions by focussing on the period covered by regional development policies carried out by European Community. The analysis reveals that poorer regions in Italy have indeed caught up with the richer regions over the period 1994-2004 and much of this convergence process has occurred towards region-specific steady states. Secondly, we consider Structural Funds as a conditioning variable in the convergence equation by using recently available data on expenditure implemented during the Second and the Third Planning Period. Our panel estimates point to a positive and significant impact of the Structural Funds on regional convergence in Italy over the period 1994-2004. When the Structural Funds are considered individually we find that the expenditure allocated by ERDF has medium term positive and significant returns while support to agriculture has short-term positive effects on growth which wane quickly. Finally, our results cast some doubt both on the (i) distributive efficiency of resources allocated by ESF and (ii) on the effectiveness of the intervention policies in support to education, Human capital and employment.

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Bibliographic Info

Paper provided by Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia in its series Working Paper CRENoS with number 200603.

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Date of creation: 2006
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Handle: RePEc:cns:cnscwp:200603

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Cited by:
  1. Daniele VITTORIO, 2009. "Public Spending And Regional Convergence In Italy," Journal of Applied Economic Sciences, Spiru Haret University, Faculty of Financial Management and Accounting Craiova, vol. 4(2(8)_Summ).
  2. Francesco Aiello & Valeria Pupo, 2009. "Structural Funds And Economic Divide In Italy," Working Papers 200914, Università della Calabria, Dipartimento di Economia, Statistica e Finanza (Ex Dipartimento di Economia e Statistica).
  3. Forte, Francesco & Magazzino, Cosimo & Mantovani, Michela, 2010. "On the failure of European planning for less developed regions. The case of Calabria," MPRA Paper 25527, University Library of Munich, Germany.
  4. Pupo Valeria & Aiello Francesco, 2009. "L'impatto della politica regionale dell'Unione Europea. Uno studio sulle regioni italiane," Rivista italiana degli economisti, Società editrice il Mulino, issue 3, pages 421-454.
  5. Torrisi, Gianpiero & Pike, Andy & Tomaney, John & Tselios, Vassilis, 2011. "(Re-)exploring the link between devolution and regional disparities in Italy," MPRA Paper 32212, University Library of Munich, Germany.
  6. Stefano Magrini, 2007. "Analysing Convergence through the Distribution Dynamics Approach: Why and how?," Working Papers 2007_13, Department of Economics, University of Venice "Ca' Foscari".
  7. Aiello, Francesco & Pupo, Valeria, 2009. "Capacità di gestione, efficienza istituzionale e impatto dei Fondi Strutturali in Italia
    [The Impact of Structural Funds in Italy]
    ," MPRA Paper 14429, University Library of Munich, Germany.
  8. Daniele, Vittorio, 2009. "Regional convergence and public spending in Italy. Is there a correlation?," MPRA Paper 14334, University Library of Munich, Germany.
  9. Francesco Aiello & Valeria Pupo, 2009. "L’Impatto Dei Fondi Strutturali In Italia," Working Papers 200901, Università della Calabria, Dipartimento di Economia, Statistica e Finanza (Ex Dipartimento di Economia e Statistica).

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