European cohesion policy reduce regional disparities? An empirical analysis

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European cohesion policy reduce regional disparities? An empirical analysis

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Sjef Ederveen
Joeri Gorter

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Abstract

European cohesion policy entails predominantly the funding of infrastructure and employment projects in lagging regions of EU Member States. It involves the distribution of more than 35 billion euro annually, making it the second most important EU policy in budgetary terms. Its main aim is to reduce regional disparities in regional welfare.

This paper investigates to what extent European cohesion policy achieves this aim. The data reveal poorer regions do tend to receive more cohesion support. The policy thus satisfies a necessary condition for its effectiveness. It remains, however, unclear whether cohesion support significantly increases economic growth. In particular, the more independent convergence one presupposes, the less well cohesion support appears to work. This points at a clear trade-off: either one accepts that regional disparities are here to stay, or one concludes that cohesion policy fails.

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Paper provided by CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Discussion Papers with number 15.

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Handle: RePEc:cpb:discus:15

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Find related papers by JEL classification:
O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Regional, Urban, and Rural Analyses
O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
O52 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Europe
R11 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Analysis of Growth, Development, and Changes
R58 - Urban, Rural, and Regional Economics - - Regional Government Analysis - - - Regional Development Policy

Cited by:
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Floro Ernesto Caroleo & Gianluigi Coppola, 2006. "The Impact of the Institutions on Regional Unemployment Disparities in Europe," Discussion Papers 4_2006, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy. [Downloadable!]
Floro Ernesto Caroleo & Gianluigi Coppola, 2005. "The impact of institutions on Regional unemployment disparities," ERSA conference papers ersa05p758, European Regional Science Association. [Downloadable!]

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