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Ripples in a rising tide: Why some EU regions receive more structural funds than others

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  • Bodenstein, Thilo and Achim Kemmerling

Abstract

We investigate the distribution of European Union (EU) Structural Funds across EU regions. We draw from literature on the political economy of national intergovernmental grants and on the two-tiered bargaining process in the EU. Bargaining on the distribution of Structural Funds takes place on the level between regions and their respective national governments, but is influenced by bargaining that occurs on the intergovernmental level. We test our claims with a data set containing the distribution of Objective-1 and Objective-2 funds across EU regions, as well as economic, institutional and electoral variables. Adjusting for selection bias, we find that the official allocation criteria are not sufficient determinants for explaining the distribution of regional transfers. For Objective-2 they even bear the opposite sign. As for the political variable 'federalist regions' we find that Objective-1 regions receive significantly more funds, whereas 'stronger electoral competition' significantly increases funding of Objective-2 regions.

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  • Bodenstein, Thilo and Achim Kemmerling, 2012. "Ripples in a rising tide: Why some EU regions receive more structural funds than others," European Integration online Papers (EIoP), European Community Studies Association Austria (ECSA-A), vol. 16, January.
    • Handle: RePEc:erp:eiopxx:p0220
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    Cited by:

    1. Simon, Jenny & Valasek, Justin Mattias, 2012. "Efficient fiscal spending by supranational unions," Discussion Papers, Research Unit: Economics of Change SP II 2012-305, WZB Berlin Social Science Center.
    2. Zareh Asatryan & Annika Havlik, 2020. "The political economy of multilateral lending to European regions," The Review of International Organizations, Springer, vol. 15(3), pages 707-740, July.
    3. Peter Schmidt, 2016. "Internal migration and EU regional policy transfer payments: A panel data analysis for the EU-28 member countries," ERSA conference papers ersa16p172, European Regional Science Association.
    4. Peter Schmidt, 2014. "EU regional policy and its theoretical foundations revisited," ERSA conference papers ersa14p1560, European Regional Science Association.
    5. Cace, Corina & Cace, Sorin & Nicolaescu, Victor, 2011. "Absorption of the structural funds in Romania," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 84-105, June.
    6. Zsófia Papp, 2019. "Votes, money can buy. The conditional effect of EU Structural Funds on government MPs’ electoral performance," European Union Politics, , vol. 20(4), pages 543-561, December.
    7. Dominik Schraff, 2014. "Buying turnout or rewarding loyalists? Electoral mobilization and EU structural funding in the German Länder," European Union Politics, , vol. 15(2), pages 277-288, June.
    8. Andrés Rodríguez-Pose & Julie Courty, 2018. "Regional lobbying and structural funds. Do regional representation offices in Brussels deliver?," Papers in Evolutionary Economic Geography (PEEG) 1809, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Feb 2018.
    9. Jenny Simon & Justin Mattias Valasek, 2013. "Centralized Fiscal Spending by Supranational Unions," CESifo Working Paper Series 4321, CESifo.
    10. Bianka Dettmer & Thomas Sauer, 2019. "Implementation of European Cohesion Policy at the sub‐national level: Evidence from beneficiary data in Eastern Germany," Papers in Regional Science, Wiley Blackwell, vol. 98(1), pages 167-189, February.
    11. Florence Bouvet & Sandy Dall'Erba, 2010. "European Regional Structural Funds: How Large is the Influence of Politics on the Allocation Process?," Journal of Common Market Studies, Wiley Blackwell, vol. 48(3), pages 501-528, June.
    12. Nana Zubek & Christian H.C.A. Henning, 2016. "Local Government, Spatial Spillovers and the Absorption of EU Structural Funds," Journal of Agricultural Economics, Wiley Blackwell, vol. 67(2), pages 368-397, June.

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