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How does Sub-National Autonomy Affect the Effectiveness of Structural Funds?

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  • Cornelius Bähr

Abstract

One of the European Union's explicitly formulated goals is reducing the lags in development and narrowing the gaps in income between its member states and regions. In order to attain these goals, the Union's regional policy employs a system of vertical conditional grants known as the Structural Funds. Various attempts have been made to evaluate the effectiveness of this policy in promoting convergence. This paper adds to the existing literature in focusing the investigation on the role of the member states' federal structure. A short discussion drawing mainly on the theory of fiscal federalism provides the basis for an empirical model. Using a sample of 13 European countries in the period from 1975-1995 we estimate the effect varying decentralization among the member states has on the conditional effectiveness of Structural Funds expenditure. The results suggest that Structural Funds are more effective in promoting growth when the states exhibit a higher degree of decentralization. Copyright 2008 Blackwell Publishing Ltd..

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  • Cornelius Bähr, 2008. "How does Sub-National Autonomy Affect the Effectiveness of Structural Funds?," Kyklos, Wiley Blackwell, vol. 61(1), pages 3-18, February.
  • Handle: RePEc:bla:kyklos:v:61:y:2008:i:1:p:3-18
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    Cited by:

    1. Mohl, Philipp & Hagen, Tobias, 2008. "Does EU Cohesion Policy Promote Growth? Evidence from Regional Data and Alternative Econometric Approaches," ZEW Discussion Papers 08-086, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    2. repec:got:cegedp:77 is not listed on IDEAS
    3. Tobias Hagen & Philipp Mohl, 2011. "Econometric Evaluation of EU Cohesion Policy: A Survey," Chapters,in: International Handbook on the Economics of Integration, Volume III, chapter 16 Edward Elgar Publishing.
    4. Ivo Bischoff & Frédéric Blaeschke, 2013. "Incentives and Influence Activities in the Public Sector: the Trade-off in Performance Budgeting and Conditional Grants," MAGKS Papers on Economics 201320, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    5. Riccardo Crescenzi & Mara Giua, 2016. "Eu Cohesion Policy In Context: Does A Bottom-Up Approach Work In All Regions?," Departmental Working Papers of Economics - University 'Roma Tre' 0206, Department of Economics - University Roma Tre.
    6. Ivo Bischoff & Frédéric Blaeschke, 2012. "Window-Dressing and Lobbying in Performance-Budgeting: a Model for the Public Sector," MAGKS Papers on Economics 201212, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    7. Susanne Lechner & Renate Ohr, 2011. "The right of withdrawal in the treaty of Lisbon: a game theoretic reflection on different decision processes in the EU," European Journal of Law and Economics, Springer, vol. 32(3), pages 357-375, December.
    8. Mohl, Philipp & Hagen, Tobias, 2008. "Which is the Right Dose of EU Cohesion Policy for Economic Growth?," ZEW Discussion Papers 08-104, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    9. Gruševaja, Marina & Pusch, Toralf, 2011. "How does Institutional Setting Affect the Impact of EU Structural Funds on Economic Cohesion? New Evidence from Central and Eastern Europe," IWH Discussion Papers 17/2011, Halle Institute for Economic Research (IWH).
    10. Mohl, P. & Hagen, T., 2010. "Do EU structural funds promote regional growth? New evidence from various panel data approaches," Regional Science and Urban Economics, Elsevier, vol. 40(5), pages 353-365, September.
    11. Hagen, Tobias & Mohl, Philipp, 2009. "How does EU cohesion policy work? Evaluating its effects on fiscal outcome variables," ZEW Discussion Papers 09-051, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    12. Chiara Del Bo & Massimo Florio & Silvia Vignetti & Emanuela Sirtori, 2011. "Additionality and regional development: are EU Structural Funds complements or substitutes of national Public Finance?," Working Papers 201101, CSIL Centre for Industrial Studies.
    13. Sacchi, Agnese & Salotti, Simone, 2014. "The asymmetric nature of fiscal decentralization: theory and practice," MPRA Paper 54506, University Library of Munich, Germany.
    14. Marco Di Cataldo, 2016. "Gaining and losing EU Objective 1 funds: Regional development in Britain and the prospect of Brexit," LEQS – LSE 'Europe in Question' Discussion Paper Series 120, European Institute, LSE.

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