The Effectiveness of EU Cohesion Policy Revisited : are EU Funds Really Additional?

Wostner, Peter and Šlander, Sonja (2009) The Effectiveness of EU Cohesion Policy Revisited : are EU Funds Really Additional? [Report]

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    Abstract

    Is Cohesion policy effective? Does it contribute to the reduction of development disparities and strengthen competitiveness in the EU? These are the questions that have inspired a growing body of research on Cohesion policy evaluation, which has come to varied and inconclusive results. There has been significant variation with regards to the established (in) effectiveness of Cohesion policy among different methodological approaches. Ideally, the econometric tests would be able to provide conclusive results, which would represent the most convincing empirical proof. Unfortunately, the nature of Cohesion policy itself is posing serious limitations to the econometric approach, which has usually been limited to the direct testing of the macroeconomic impact of the resources. In order to circumvent these shortcomings, the authors have continued to rely on the econometric methods, but have nevertheless proved the benefits of using an indirect estimation approach. They have confirmed that Cohesion policy effectively increases the structural expenditures of the recipient Member States, thereby fulfilling one of the necessary conditions for effectiveness of EU transfers. Overall, effectiveness still depends on other conditions, among which the micro-efficiency of funds' management and their effect on private investment stand out in particular.