Additionality and regional development: are EU Structural Funds complements or substitutes of national Public Finance?
AbstractThis paper deals with the effects of the transfer of additional funds on the real economy of recipient countries, in particular the European Member States. The intended and unintended effects of additional funds on national public finances and, ultimately, economic performance are discussed. Understanding the real effects of additional public funds and the possible complementarity or substitutability with national public finance is important for shaping the policies for the allocation of Structural Funds. Verification of additionality plays a role in ensuring that additional funds are used to effectively complement national expenditure programmes. In the case of the European Union, it is widely recognised that the current verification mechanism is affected by weaknesses, that prevent it from providing reliable and useful data to effectively assess additionality. For this reason, the paper suggests the European Commission to move away from the current verification approach and to adopt a new one that could more effectively assess to what extent the Structural Funds complement national investments.
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Bibliographic InfoPaper provided by Centre for Industrial Studies (CSIL) in its series Working Papers with number 201101.
Length: 28 pages
Date of creation: 01 Apr 2011
Date of revision:
Public investment; substitution; displacement;
Find related papers by JEL classification:
- H5 - Public Economics - - National Government Expenditures and Related Policies
- H6 - Public Economics - - National Budget, Deficit, and Debt
- H7 - Public Economics - - State and Local Government; Intergovernmental Relations
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-07-02 (All new papers)
- NEP-EUR-2011-07-02 (Microeconomic European Issues)
- NEP-GEO-2011-07-02 (Economic Geography)
- NEP-PUB-2011-07-02 (Public Finance)
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