How Does Sub-National Autonomy Affect the Effectiveness of Structural Funds?
Economic and social cohesion between the EU Member States is one of the explicitly stated goals in the Treaty on European Union. The EUâ€™s Structural Funds as a part of the Unionâ€™s regional policies are a mechanism of conditional grants that provides co-financing for growth enhancing investments. Evidence on the effectiveness of the Structural Funds is mixed. While Boldrin and Canova (2001) find no sign of a catch-up effect of regions receiving aid for the period of 1980-1996, Beugelsdijk and Eijffinger (2005) find a positive relationship between (lagged) Structural Funds expenditure and GDP growth at the national level covering 1995-2001. De La Fuente (2002) points to the fact that the inclusion of conditioning variables might also play a crucial role for the results. Ederveen, deGroot and Nahuis (2002) find that Structural Funds themselves have a negative impact on growth. However, the impact turns out to be significantly positive, when interacting variables measuring institutional quality are taken into account. Similarly, Esposti (2005) shows that additional policy measures (spending on CAP) can have significant counter-effects on the effectiveness of Structural Funds expenditure. So far the federal structure of the EU Member States did not attract much attention when the effectiveness of the Structural Funds is considered. Although the EU Commission requires the inclusion of regional authorities and stakeholders in the planning and implementation procedure of programs funded by Structural Funds, one should expect that the performance is better, where the sub-national authorities are more accustomed to pursuing economic policy and implementing programs. This should be the case in states with a higher degree of sub-national autonomy. Using panel-data for a sample of 13 EU Member States from 1960-1995 the effects of Structural Funds on growth are analysed. Then a decentralization index by Stegarescu (2004) is introduced as an interacting variable in order to measure the degree of sub-national autonomy. This paper shows that increasing sub-national autonomy has a significantly positive impact on the effectiveness of the Unionâ€™s Structural Funds expenditure.
|Date of creation:||Aug 2006|
|Date of revision:|
|Contact details of provider:|| Postal: Welthandelsplatz 1, 1020 Vienna, Austria|
Web page: http://www.ersa.org
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Wallace E. Oates, 1999. "An Essay on Fiscal Federalism," Journal of Economic Literature, American Economic Association, vol. 37(3), pages 1120-1149, September.
- N. Gregory Mankiw & David Romer & David N. Weil, 1992.
"A Contribution to the Empirics of Economic Growth,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 107(2), pages 407-437.
- Robert Fenge & Matthias Wrede, 2004.
"EU Regional Policy: Vertical Fiscal Externalities and Matching Grants,"
CESifo Working Paper Series
1146, CESifo Group Munich.
- Robert Fenge & Matthias Wrede, 2004. "EU Regional Policy: Vertical Fiscal Externalities And Matching Grants," Royal Economic Society Annual Conference 2004 63, Royal Economic Society.
- Sjed Ederveen & Joeri Gorter & Ruud de Mooij & Richard Nahuis, 2003. "Funds and Games: The Economics of European Cohesion Policy," Occasional Papers 03, European Network of Economic Policy Research Institutes.
- Rafael Doménech & Antonio Maudes & Juan Varela, 2000. "Fiscal flows in Europe: The redistributive effects of the EU budget," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 136(4), pages 631-656, December.
- Robert J. Barro & Paul M. Romer, 1991.
National Bureau of Economic Research, Inc, number barr91-1, June.
- de la Fuente, Angel & Doménech, Rafael, 2000.
"Human Capital In Growth Regressions: How Much Difference Does Data Quality Make?,"
CEPR Discussion Papers
2466, C.E.P.R. Discussion Papers.
- Angel de la Fuente & Rafael Doménech, 2006. "Human Capital in Growth Regressions: How Much Difference Does Data Quality Make?," Journal of the European Economic Association, MIT Press, vol. 4(1), pages 1-36, 03.
- ?gel de la Fuente & Rafael Dom?ech, . "Human Capital In Growth Regressions: How Much Difference Does Data Quality Make?," UFAE and IAE Working Papers 446.00, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Angel de la Fuente & Rafael Donénech, 2000. "Human Capital in Growth Regressions: How much Difference Does Data Quality Make?," OECD Economics Department Working Papers 262, OECD Publishing.
- Michele Boldrin & Fabio Canova, 2001. "Inequality and convergence in Europe's regions: reconsidering European regional policies," Economic Policy, CEPR;CES;MSH, vol. 16(32), pages 205-253, 04.
- S. Ederveen & H.L.F. de Groot & R. Nahuis, 2003.
"Fertile Soil for Structural Funds? A panel data analysis of the conditional effectiveness of European cohesion policy,"
03-14, Utrecht School of Economics.
- Sjef Ederveen & Henri L . F. Groot & Richard Nahuis, 2006. "Fertile Soil for Structural Funds?A Panel Data Analysis of the Conditional Effectiveness of European Cohesion Policy," Kyklos, Wiley Blackwell, vol. 59(1), pages 17-42, 02.
- Sjef Ederveen & Henri de Groot & Richard Nahuis, 2002. "Fertile soil for structural funds? A panel data analysis of the conditional effectiveness of European cohesion policy," CPB Discussion Paper 10, CPB Netherlands Bureau for Economic Policy Analysis.
- Nazrul Islam, 2003. "What have We Learnt from the Convergence Debate?," Journal of Economic Surveys, Wiley Blackwell, vol. 17(3), pages 309-362, 07.
- Stefania BUSSOLETTI & Roberto ESPOSTI, 2004. "Regional Convergence, Structural Funds and the Role of Agricolture in the EU. A Panel-Data Approach," Working Papers 220, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
- Angel de la Fuente, 2002. "Does cohesion policy work?," UFAE and IAE Working Papers 563.03, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Nazrul Islam, 1995. "Growth Empirics: A Panel Data Approach," The Quarterly Journal of Economics, Oxford University Press, vol. 110(4), pages 1127-1170.
When requesting a correction, please mention this item's handle: RePEc:wiw:wiwrsa:ersa06p470. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gunther Maier)
If references are entirely missing, you can add them using this form.