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The Macroeconomic Effects of EU Regional Structural Funds

Author

Listed:
  • Fabio Canova
  • Evi Pappa

Abstract

We examine the macroeconomic effects of two EU regional structural funds. The European regional development fund (ERDF) has positive short term average consequences, but gains typically dissipate within 3 years. The European Social Fund has insignificant average short term effects, but the medium term effect is positive and economically important. There are regional heterogeneities in terms of location, level of development, EU tenure, Euro area membership, and national borders. The reaction of regional government expenditure to shocks in the structural funds accounts for the differences. The implications for the EU Recovery and Resilience Facility are discussed.

Suggested Citation

  • Fabio Canova & Evi Pappa, 2025. "The Macroeconomic Effects of EU Regional Structural Funds," Journal of the European Economic Association, European Economic Association, vol. 23(1), pages 327-360.
    • Handle: RePEc:oup:jeurec:v:23:y:2025:i:1:p:327-360.
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    File URL: http://hdl.handle.net/10.1093/jeea/jvae031
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    Citations

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    Cited by:

    1. Giuseppe Cavaliere & Luca Fanelli & Marco Mazzali, 2025. "The Size and Uncertainty of Government Spending Multipliers in Italian Regions," Working Papers wp1216, Dipartimento Scienze Economiche, Universita' di Bologna.
    2. Mauro Lanati & Giorgia Giovannetti & Lisa Grazzini & Annalisa Luporini & Michel Rizzo, 2025. "The Effect of EU Funds on Labor Demand: the case of Italian Provinces," Working Papers - Economics wp2025_17.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    3. Gianluca Pallante, 2025. "Reassessing the Cross-Sectional Fiscal Multiplier: Evidence from U.S. Defense Procurement, 1966-2019," LEM Papers Series 2025/18, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    4. Arbolino, R. & Boffardi, R. & De Simone, L. & Di Caro, P., 2025. "Geopolitical risks and the effectiveness of the EU funds: Heterogeneity in country impact," Structural Change and Economic Dynamics, Elsevier, vol. 75(C), pages 199-212.
    5. Aligishiev, Zamid & Blotevogel, Robert, 2025. "No quick fix: The recovery and resilience plan and external position in Greece," Economic Modelling, Elsevier, vol. 151(C).

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