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'The winner takes it all' or a story of the optimal allocation of the European Cohesion Fund

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  • Benoit Dicharry
  • Phu Nguyen-Van
  • Thi Kim Cuong Pham

Abstract

This paper aims to determine an optimal allocation of the European Cohesion Fund (ECF) and compares it with the observed allocation. This optimal allocation is the solution of a donor optimization problem which maximizes recipient countries' GDP per capita to achieve economic convergence in the EU. Compared to the observed allocation, our solution can identifiy the recipient countries that can benefit from higher ECF transfers than the observed levels, as those having low relative GDP per capita, large population size and where the ECF has a strong capacity to support economic growth. Result is robust to changes in the specification of the donor's utility function.

Suggested Citation

  • Benoit Dicharry & Phu Nguyen-Van & Thi Kim Cuong Pham, 2018. "'The winner takes it all' or a story of the optimal allocation of the European Cohesion Fund," Working Papers of BETA 2018-46, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    • Handle: RePEc:ulp:sbbeta:2018-46
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    Cited by:

    1. Benoit Dicharry & Nguyen-Van Phu & Thi Kim Cuong Pham, 2019. "La politique de cohésion de l’UE et la convergence économique," Bulletin de l'Observatoire des politiques économiques en Europe, Observatoire des Politiques Économiques en Europe (OPEE), vol. 41(1), pages 5-11, December.
    2. Benoit Dicharry & Lubica Stiblarova, 2023. "Positive externalities of the EU cohesion policy: Toward more synchronised CEE countries?," International Economics and Economic Policy, Springer, vol. 20(3), pages 485-508, July.
    3. Augustin Ignatov, 2024. "European highways and the geographic diffusion of economic activities from agglomerations to less urbanised areas," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 51(2), pages 351-377, May.
    4. Danijela Pantoviæ & Nikola Boškoviæ & Tijana Petroviæ, 2022. "Measuring Convergence in Tourism Competitiveness of Natural and Cultural Resources: A Case of the Balkans and Eastern Europe," Journal of Economics / Ekonomicky casopis, Institute of Economic Research, Slovak Academy of Sciences, vol. 70(9-10), pages 703-722, August.
    5. Paolo Di Caro & Ugo Fratesi, 2022. "One policy, different effects: Estimating the region‐specific impacts of EU cohesion policy," Journal of Regional Science, Wiley Blackwell, vol. 62(1), pages 307-330, January.
    6. Benoit Dicharry & Nguyen-Van Phu & Thi Kim Cuong Pham, 2019. "La politique de cohésion de l’UE et la convergence économique," Bulletin de l'Observatoire des politiques économiques en Europe, Observatoire des Politiques Économiques en Europe (OPEE), vol. 41(1), pages 5-11, November.
    7. Dzhumashev, Ratbek & Hailemariam, Abebe, 2021. "Foreign aid and the quality of economic institutions," European Journal of Political Economy, Elsevier, vol. 68(C).

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    More about this item

    Keywords

    Economic growth; European cohesion policy; Foreign aid.;
    All these keywords.

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • 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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