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Boulevard of broken dreams. The end of the EU funding (1997: Abruzzi, Italy)

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Listed:
  • Guglielmo Barone

    () (Bank of Italy)

  • Francesco David

    () (Bank of Italy)

  • Guido de Blasio

    () (Bank of Italy)

Abstract

EU regional policies aim to push regions into self-sustaining growth. Successful interventions would imply a higher growth rate, not only during the treatment (when the region benefits from the transfers), but also after the expiry of the program (when the financing terminates). We investigate to what extent this happened in the case of Italy’s Abruzzi region, which entered into the Objective 1 (Convergence) program in 1989 and exited it in 1996 (without a transitional regime). More specifically we focus upon the post expiry period by implementing a synthetic control approach. Our results indicate that exiting the program had a negative effect on regional per-capita GDP growth. This result is a confirmation of the widespread evidence that during their implementation EU regional policies help boost the economic performance of the treated regions. However, additional evidence suggests that the permanent effect of the treatment is negligible: the policies fail to transfer the treated regions to a permanently higher GDP growth path.

Suggested Citation

  • Guglielmo Barone & Francesco David & Guido de Blasio, 2016. "Boulevard of broken dreams. The end of the EU funding (1997: Abruzzi, Italy)," Temi di discussione (Economic working papers) 1071, Bank of Italy, Economic Research and International Relations Area.
  • Handle: RePEc:bdi:wptemi:td_1071_16
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    References listed on IDEAS

    as
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    Cited by:

    1. Emanuele Ciani & Francesco David & Guido de Blasio, 2017. "Local labour market heterogeneity in Italy: estimates and simulations using responses to labour demand shocks," Temi di discussione (Economic working papers) 1112, Bank of Italy, Economic Research and International Relations Area.
    2. Carfora, Alfonso & Romano, Antonio A. & Ronghi, Monica & Scandurra, Giuseppe, 2017. "Renewable generation across Italian regions: Spillover effects and effectiveness of European Regional Fund," Energy Policy, Elsevier, vol. 102(C), pages 132-141.

    More about this item

    Keywords

    EU cohesion policy; Regional growth; Synthetic control method;

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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