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Between development and social policies: the impact of European Structural Funds in Objective 1 Regions

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Author Info
Andrés Rodríguez-Pose
Ugo Fratesi

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Abstract

European regional support has grown in parallel with European integration. The funds targeted at achieving greater economic and social cohesion and reducing disparities within the European Union (EU) have more than doubled in relative terms since the end of the 1980s, making development policies the second most important policy area in the EU. The majority of the development funds have been earmarked for Objective 1 regions, i.e. regions whose GDP per capita is below the 75% threshold of the EU average. However, the European development policies have come under increasing criticism based on two facts: the lack of upward mobility of assisted regions and the absence of regional convergence. This paper assesses, using cross-sectional and panel data analyses, the failure so far of European development policies to fulfil their objective of delivering greater economic and social cohesion by examining how European Structural Fund support is allocated among different development axes in Objective 1 regions. We find that, despite the concentration of development funds on infrastructure and, to a lesser extent, on business support, the returns to commitments on these axes are not significant. Support to agriculture has short-term positive effects on growth, but these wane quickly, and only investment in education and human capital – which only represents about one eight of the total commitments – has medium-term positive and significant returns.

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Paper provided by European Economy Group in its series European Economy Group Working Papers with number 28.

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Length: 48 pages
Date of creation: 2003
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Handle: RePEc:eeg:euroeg:28

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  1. Simón Sosvilla-Rivero & Óscar Bajo Rubio & Carmen Díaz-Roldán, 2004. "Assessing the effectiveness of EU’s regional policies:a new approach," Economic Working Papers at Centro de Estudios Andaluces E2004/39, Centro de Estudios Andaluces. [Downloadable!]
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  2. Ugo Fratesi, 2004. "Regional Economies, Innovation and Competitiveness in a System Dynamics Representation," Urban/Regional 0407005, EconWPA. [Downloadable!]
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  3. Martin Falk & Franz Sinabell, 2008. "The Effectiveness of Objective 1 Structural Funds in the EU 15: New Empirical Evidence from NUTS 3 Regions," WIFO Working Papers 310, WIFO. [Downloadable!]
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  6. Paul Cheshire & Stefano Magrini, 2006. "European Urban Growth: Now for Some Problems of Spaceless and Weightless Econometrics," ERSA conference papers ersa06p156, European Regional Science Association. [Downloadable!]
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  7. Renzo Orsi & Katarzyna Zukrowska, 2004. "Policy Advice: Markets and Policies," Eastward Enlargement of the Euro-zone Working Papers wp20, Free University Berlin, Jean Monnet Centre of Excellence, revised 01 Feb 2004. [Downloadable!]
  8. Akcomak, Semih & Ter Weel, Bas, 2007. "How do social capital and government support affect innovation and growth? Evidence from the EU regional support programmes," UNU-MERIT Working Paper Series 009, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology. [Downloadable!]
  9. James Foreman-Peck & Gerry Makepeace & Brian Morgan, 2006. "Growth and profitability of small and medium-sized enterprises: Some Welsh evidence," Regional Studies, Taylor and Francis Journals, vol. 40(4), pages 307-320, June. [Downloadable!] (restricted)
  10. Jesús López-Rodríguez & J. Andrés Faiña, 2006. "Objective 1 regions versus non-objective 1 regions. What does the Theil Index tell us?," Applied Economics Letters, Taylor and Francis Journals, vol. 13(12), pages 815-820, October. [Downloadable!] (restricted)
  11. Peter Gripaios & Paul Bishop, 2006. "Objective One Funding in the UK: A Critical Assessment," Regional Studies, Taylor and Francis Journals, vol. 40(8), pages 937-951, November. [Downloadable!] (restricted)
  12. Roberto Ezcurra & Pedro Pascual & Manuel Rapún, 2006. "Regional mobility in the European Union," Applied Economics, Taylor and Francis Journals, vol. 38(19), pages 2237-2253, October. [Downloadable!] (restricted)
  13. Ioannis Chorianopoulos & Theodoros Iosifides, 2006. "The Neoliberal Framework of EU Urban Policy in Action: Supporting Competitiveness and Reaping Disparities," Local Economy, Taylor and Francis Journals, vol. 21(4), pages 409-422, November. [Downloadable!] (restricted)
  14. Stefano Magrini & Paul Cheshire, 2006. "Raising Urban Productivity or Attracting People? Different Causes, Different Consequences," Working Papers 2006_24Classification-JEL, University of Venice "Ca' Foscari", Department of Economics. [Downloadable!]
  15. Maria Francesca Cracolici & Miranda Cuffaro & Peter Nijkamp, 2007. "Geographical Distribution of Unemployment: An Analysis of Provincial Differences in Italy," Tinbergen Institute Discussion Papers 07-065/3, Tinbergen Institute. [Downloadable!]
  16. GUILLAIN, Rachel & DALL'ERBA, Sandy & LE GALLO, Julie, 2007. "Politiques de développement et croissance régionale en Europe : le rôle des rendements croissants et des dépendances spatiales," LEG - Document de travail - Economie 2007-02, LEG, Laboratoire d'Economie et de Gestion, CNRS UMR 5118, Université de Bourgogne. [Downloadable!]
  17. Prodromos-Ioannis Prodromidis, 2006. "Functional Economies Or Administrative Units in Greece: What Difference Does It Make for Policy?," ERSA conference papers ersa06p358, European Regional Science Association. [Downloadable!]
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