Premature exit from and delayed entrance into the less developed status: An empirical appraisal of the structural funds allocation criterion

This paper investigates the impact of the main criterion employed by the European Commission for the allocation of the largest portion of Structural Funds, based on the threshold of the 75% of European Union (EU) average gross domestic product (GDP) per capita. We focus on the 2014–2020 programming period and on EU-15 regions to analyze if this criterion has penalized some of them, as a consequence of the 2004 EU enlargement, which has represented an exogenous shock in the allocation process, due to the economic backwardness of new member states. Through the application of Synthetic Control Methods and Difference-in-Differences estimators at different geographical scales, we show that regions that did not obtain the less developed status in both the programming period 2007–2013 and 2014–2020, but that would have obtained it in the period 2014–2020 without the 2004 EU enlargement, experienced a significantly lower GDP per capita growth between −10.5% and −5.7%. Conversely, territories that in the period 2014–2020 lost the less developed status, previously obtained in the time frame 2007–2013, were not characterized by a significantly lower economic growth, providing some evidence of the effectiveness of the safety net.     

EU Regional Policy After 2006: Will Scotland Notice the Difference?

In order to accommodate the recent enlargements of the European Union (EU) there has been considerable changes to the operation of EU regional policy which means that Scotland along with other regions in the EU-15 will receive considerably less money from the Structural Funds in the future. This article discusses the extent to which the reduction in EU funding for economic development will impact on the Scottish economy. The issue is explored by considering the contribution, which Structural Funds have made in the past to economic development in Western Scotland, which has received the lion's share of the money allocated to Scotland. It is suggested that whilst the amount of economic development in Scotland will not be significantly reduced as a result of the decline in EU funds the types of projects and organizations receiving funding will alter because of changes made to the way in which the funds are administered in Scotland.     

Are we spending too much to grow? The case of Structural Funds

We evaluate whether the impact of EU Structural and Cohesion Funds (EUF) on Member States’ regional economic growth depends on the intensity of treatment, measured by the normalized amount of funds distributed in each region. We use an original data set that covers all the main sources of EUF and extend the regression discontinuity design to the case of continuous treatment. The results suggest an average positive effect on regional growth. The estimated conditional intensity‐growth function is concave and presents a maximum value. Therefore, the exceeding funds could have been allocated to other lagging regions without reducing the effect on growth.     

The dynamics of the community support framework for Greece and its contribution to regional convergence

The objective of this paper is to shed light on the dynamic aspects of the Community Support Framework for Greece and to further explore its contributions to regional convergence. Given that, the majority of the Greek regions have been classified among the poorest regions of the European Union (EU) with a major inter and intra regional divergence gap, the issue of catching up the convergence factors acquires paramount importance in view of the new trends of European Community (EC) Regional Policies. Unquestionably, the convergence of the Greek regions requires a series of macroeconomic management devices and the encouragement of a series of soft and hard infrastructure projects which will restructure, upgrade and adjust their regional economy. The analysis of this paper will focus on the assistance stemming from the Regional and Structural Funds of the EU, plus the Cohesion Fund with the aim to uncover the factors which determine the extension and intensity of the convergence and divergence procedure. Using the data from the Community Support Framework (CSF I) (1989–1993), which has already been completed, attention will be paid to some of the basic problems which decisively impedes the real convergence of the Greek regions. The author will also examine in depth the criteria used by the competent authorities in allocating the funds to the regional bodies in relation with the existing regional imbalances and then he will propose a new synthetic method considering more factors which influence the final allocation approach. The conclusions of the paper might systematically unravel a series of problems facing the regions both socio‐economic and administrative which if they are not effectively confronted may possibly enlarge the existing divergence gap of the Greek regions.     

Unwritten Factors Affecting Structural Funds: The Influence of Regional Political Behaviours on the Implementation of EU Cohesion Policy

While EU regional policy has the ambitious objective of supporting lagging regions and promoting inter-regional convergence, its impact is dependent on the ability of regional policymakers to secure and use EU funding to meet the region's needs. This paper aims to show under which conditions politics has a defining influence on the distribution, allocation and utilization of structural funds (SF), specifically in Objective 1 regions. The empirical analysis focuses on the 2000–2006 programming cycle in France, Germany, Italy, Spain and the UK. The results show that regions politically aligned with national governing coalitions tend to perform better in terms of received SF support and enjoy more flexibility in implementing SF. However, the influence of regional political behaviours on economic performances is very limited. The findings confirm the importance of politics in influencing SF implementation, but its limited influence on economic outcomes.     

Regional Inequality in the EU: How to Finance Greater Cohesion

After outlining the overall scale and evolution of European Union (EU) public expenditure, this paper examines the mechanisms driving the allocation of Cohesion Policy resources. The analysis reveals the extent to which the outcome of the policy's principle- and formula-driven allocation mechanisms is modified by precedent and politico-economic considerations. In particular it shows that the consequent per capita final financial allocations (the intensity of aid) are greatest not for the poorest areas: up to 84% of EU GDP per head, aid increases as income increases. The analysis also emphasizes the on–off nature of the EU policy. In the light of these results a series of simulations are carried out. Attention is given first to a more economically sensitive treatment of transition regions, whose relative growth results in shifts from one category to another and to a mechanism capable of providing differentiated support to all disadvantaged regional economies. Attention is then given to ways of ensuring that final allocations are inversely proportional to income, and that most aid is concentrated on the most disadvantaged areas (Section 5). In the conclusions attention is paid to guidelines which might apply to the reform of the EU Cohesion Policy.     

An Impact Analysis of the European Structural Funds on the Variation of the Rate of Employment and Productivity in Objective 1 Regions

Regional policies seek to enable regions to increase their competitiveness and development, and as such one priority objective of activities financed by Structural Funds is higher employment, higher productivity and economic activity. How efficiently the regions apply the funds is a fundamental issue for the development and continuity of regional policies. We, therefore, consider that determining the efficiency of European regional policies is an issue of high importance, and this is the main aim of this study. We have considered it appropriate to use the available information to apply a mathematical technique known as data envelopment analysis, which allows us to calculate the technical efficiency and inefficiency of the Structural Funds applied in the Objective 1 regions for the period 2000–2006. Furthermore, we wish to determine if the regions have been more efficient in increasing their levels of employment or in increasing productivity. Our study applies this methodology along with other methods such as regression analysis, profit analysis and factorial analysis to determine the variation in the rate of unemployment and productivity in these European Regions. The study reveals that only eight regions are efficient, although none of them is in all the models run.     

Governance, institutional capacity and partnerships in local economic development: theoretical issues and empirical evidence from the Humber Sub-region

Recent research on local and regional economic development has focused upon transformations in local governance and institutional capacity. It has been argued that local authorities have ceded power to other actors and institutions involved in economic development and regeneration, and that the success of local and regional economic development is closely related to the strength of 'institutional capacity' within an area. In this paper, we examine these claims with reference to the operation of EU Structural Funds in the Humber Sub-region of the UK. Previous research on local governance and institutional capacity has had a limited empirical focus, drawing conclusions from studies of either economically 'successful' regions or regions undergoing regulatory and institutional transformation and precluding analysis of the nature and conditions of local governance and institutional capacity in less developed regions. Our case study evidence not only suggests that arguments about the declining influence of the local state are overdrawn, but also indicates a need for more nuanced accounts of the role of institutional capacity in regional development.     

The impact of EU Objective 1 funds on regional development: Evidence from the U.K. and the prospect of Brexit

Brexit means that regions of the United Kingdom will lose access to the EU Cohesion Policy. Have EU funds been effective, and what might be the consequences of an interruption of EU financial support? This paper studies the impact of “Objective 1” funding—the highest form of EU aid—in Cornwall and South Yorkshire, two of the U.K.’s most subsidized regions. Counterfactual methodologies assessing their labor market and economic performance provide evidence of a positive effect of EU Objective 1 funds. When in 2006 South Yorkshire lost Objective 1 eligibility, this massively reduced its share of EU funds and the region was unable to sustain the gains obtained in previous years. This suggests that while Structural Funds may be effectively improving socio‐economic conditions of poorer regions, the performance of subsidized areas could be deeply affected by a reduction (or worse, an interruption) of EU aid.     

Analysing How Environmental Concerns are Integrated in the Design of the EU Structural Funds Programmes

This paper analyses the environmental measures co-financed by the European Union (EU) Structural Funds in the less-developed regions. Specifically, it studies if these environmental measures are tailored to the specific needs of the different regions and whether they are driven by an ecological modernization approach. The inclusion of environmental goals into the regional policy is also tested by analysing its connection with the main European environmental directives. We find a suitability of the regional programmes to the regional specific environmental factors, a scarce presence of the ecological modernization paradigm behind the programmes implementation and a clear orientation of the regional programmes to meet the EU legislation.     

EUROPEAN BRIEFING

This article explores alternative interpretations of the meaning and method of urban policy evaluation within the European Union (EU) Structural Funds. Using the EU URBAN Community Initiative Programme 1994-1999 it draws a distinction between 'instrumental' techniques that are primarily concerned with performance and efficiency measures and 'interpretative' approaches that stress the need to explore power relationships in the development and delivery of spending programmes. Empirically, it reflects on the interpretation of EU guidance and the MEANS (Means for Evaluating Actions of a Structural Nature) Collection to evaluate the Derry/Londonderry (UK) URBAN Sub-programme 1994-1999. The analysis concludes by emphasizing the need to ensure that urban policy evaluation is consistent with the broader social turn in the scope and content of regeneration programmes.     

An Impact Analysis of the European Structural Funds on the Variation of the Rate of Employment and Productivity in Objective 1 Regions

Regional policies seek to enable regions to increase their competitiveness and development, and as such one priority Objective of activities financed by Structural Funds is higher employment, higher productivity and economic activity. How efficiently the regions apply the funds is a fundamental issue for the development and continuity of regional policies. We therefore consider that determining the efficiency of European regional policies is an issue of high importance, and this is the main aim of this study. We have considered it appropriate to use the available information to apply a mathematical technique known as Data Envelopment Analysis (DEA), which allows us to calculate the technical efficiency and inefficiency of the Structural Funds applied in the Objective 1 regions for the period 2000–2006. Furthermore, we wish to determine if the regions have been more efficient in creasing their levels of employment or in increasing productivity. Our study applies this methodology along with other methods like regression analysis, profit analysis and factorial analysis to determine the variation in the rate of unemployment and productivity in these European Regions. The study reveals that only eight regions are efficient, although none of them is run in all the models.     

Structural Funds and Their Impact: Signed and Sealed,But Can We Deliver?

This paper seeks to examine some of the lessons from the past: in particular the 1994-1999 programming period of the EU Structural Funds. It then proposes to examine the current UK implementation of the Structural Fund programmes for 2000-2006 and raise some issues which currently emerge in terms of the UK government's new policy agenda affecting economic development. Thereafter the paper develops this analysis in order to raise some early issues in preparing for post-2006, which need to be considered in the post-devolution era in the UK.     

The European Union Structural Funds and Regional Development. The Perspective of Small and Medium Enterprises in Eastern Poland

Abstract

The article concentrates on the role of European Union (EU) structural funds in the development of small and medium enterprises (SMEs). The analysis presented in this paper is based on the results of computer-assisted telephone interviews conducted with 394 representatives of enterprises localized in three Polish Voivodships: the Podkarpackie, the Lubelskie and the Podlaskie. The entire EU structural funds are based on the assumption that by additionally financing the development of SMEs, they influence regional development indirectly. Even though EU structural funds are not the only factor influencing economic growth and the creation of Gross Domestic Product, they affect the development potential of enterprises indirectly. However, from the perspective of the representatives of researched SMEs, EU structural funds are not so significant for commitment to investment. Actually, for SMEs in Eastern Poland, they have no effect on future investment plans. This bottom-up perspective researched in one of the poorest areas of the EU puts the assumption of the positive relation between the EU structural funds and regional development into doubt.     

Higher education institutions,economic growth and GDP per capita in European Union countries

This paper presents an estimation of the contribution of Higher Education Institutions (HEIs) to economic growth and the Gross Domestic Product per capita of the European (EU) countries over the period 2000–2015. For this purpose, we analyse the universities’ effects on the supply side of their national economies, especially the contribution of the R&D of HEIs to technological capital of the European (EU) countries. We proposed a methodology of counterfactual scenarios, which assume a hypothetical situation in which HEIs do not exist, to estimating the effects of HEIs, applying techniques of growth accounting. The results obtained indicate that these effects are a significant source of growth in European (EU) countries, contributing to mitigating the adverse effects of the periods of crisis. The estimates show that GDP per capita would currently be more than 11% higher than that corresponding to a scenario without HEIs. The results obtained also show significate differences in GDP per capita between European (EU) countries associated with the activity of HEIs.     

Determinants of the Uneven Regional Participation of Firms in European Technology Programmes. The 'Low R&D Trap'

Technology is of key importance to the growth of regional firms and economies. Research has shown the association between low technology development or take-up and regional disparities. Hence technology policy is moving closer to the heart of regional policies. European innovation programmes are intended to involve firms, large and small, in international technology research and development networks. The paper focuses on the involvement of Spanish firms in such programmes. Participation tends to be low if business R&D, presence of large firms, and the development of regional innovation systems are also low. Creation of R&D infrastructure through the Structural Funds has now to be prioritized at EU level and also define a new scheme of sectoral priorities in order to support R&D innovation activities in fields diverse from high-tech, if regions are to escape the 'low R&D trap'.     

THE BORDER POPULATION EFFECTS OF EU INTEGRATION*

ABSTRACT Border cities or regions are in theory more affected by the EU integration process than more central locations as it more drastically influences their transaction costs and market potential. We find a positive empirical effect of EU enlargement as measured by the growth in population share along the integration borders. This effect is active for a limited distance (70 km) and time period (30 years), and is more important for large cities and regions. Despite this positive EU enlargement effect along the border, a location close to a border remains a burden in view of the (larger) negative general border effect.     

The Effect of Business Support on Employment in Manufacturing: Evidence from the European Union Structural Funds in Germany,Italy and Spain

This study investigates employment growth in the business activities supported by the European Cohesion Policy. We examine cross-industry, cross-regional variations in a sample of fourteen manufacturing industries and seventy European regions (in Germany, Italy and Spain) and take advantage of detailed European Union Structural Funds data at the regional level for the period 2000–2006. We show that business support is positively associated with higher employment growth in industries that are initially smaller and in those with higher growth opportunities. The results suggest that direct support to businesses by the European Cohesion Policy contributes to the growth process of employment in different industries. Because previous estimated effects at the aggregate level may in fact conceal large differences across industries, we conclude that our empirical analysis contributes to the understanding of how Structural Funds can affect industrial and regional development as well as adjustment paths.     

Prospective Future Trends in Urban–Rural Relationships Within the Territorial Agenda of the EU: A Critical Analysis of Implementation with a Special Focus on the Example of the Czech Republic

In recent years, urban–rural relationships have attracted an increasing interest for more than just the issues they represent, i.e. the growing polarization of economic growth and the ever widening disparities between cities and the countryside. Another factor includes their conceptual context that concerns—above all—the implementation of the Territorial Agenda (TA) of the EU. This paper mainly focuses on identifying the solutions of urban–rural relationships under the umbrella of the TA EU within the practical context existing in the Czech Republic. The conclusions from this paper were used as the expert basis for primary research on this issue within the framework of the Czech Presidency of the Council of the EU in 2009. The recommendations for policy-making at both the EU and the CR levels can be applied over the long-term horizon and should also be seen in the next programming period.     

Innovation and Regional Development,Do European Structural Funds make a Difference?

The article draws on a thematic evaluation of Research Technological Development and Innovation (RTDI) related actions supported by the Structural Funds to assist declining industrial areas or Objective 2 regions, during the period between 1989 and 1999. Over the 10 year period, three main approaches were identified in Objective 2 regions, the last two becoming predominant during the latter part of the period: technology push with funding of large projects such as science parks and research facilities; technology transfer with measures to disseminate technology; and demand pull with clearly identified and self contained RTDI priorities. While drawing lessons from the last decade, the paper also integrates some preliminary observations on structural funds investments for innovation during the current 2000–2006 programming period and concludes with a review of possible scenarios for the further development of RTDI in lagging regions in the framework of the Lisbon Strategy.