Ripples in a Rising Tide: Why Some EU Regions Receive More Structural Funds than Others
European Integration Online Papers, Vol. 16, No. 1, 2011
29 Pages Posted: 17 Feb 2012
Date Written: January 30, 2012
We investigate the distribution of European Union (EU) Structural Funds across EU regions. We draw from literature on the political economy of national intergovernmental grants and on the two-tiered bargaining process in the EU. Bargaining on the distribution of Structural Funds takes place on the level between regions and their respective national governments, but is influenced by bargaining that occurs on the intergovernmental level. We test our claims with a data set containing the distribution of Objective-1 and Objective-2 funds across EU regions, as well as economic, institutional and electoral variables. Adjusting for selection bias, we find that the official allocation criteria are not sufficient determinants for explaining the distribution of regional transfers. For Objective-2 they even bear the opposite sign. As for the political variable ‘federalist regions’ we find that Objective-1 regions receive significantly more funds, whereas ‘stronger electoral competition’ significantly increases funding of Objective-2 regions.
Keywords: cohesion policy, structural funds, fiscal federalism, multilevel Governance, lobbying, political economy, methodological issues, political science
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