Fertile Soil for Structural Funds? A Panel Data Analysis of the Conditional Effectiveness of European Cohesion Policy
Tinbergen Institute Working Paper No. 2002-096/3
21 Pages Posted: 5 Feb 2003
Date Written: September 2002
Structural funds are the most intensively used policy instrument by the European Union to promote economic growth in its member states and to speed up the process of convergence. This paper empirically explores the effectiveness of European Structural Funds by means of a panel data analysis for 13 countries in the European Union. We show that - on average - Structural Funds are ineffective. For countries with the 'right' institutions, however, Structural Funds are effective. The latter result is obtained for a wide range of conditioning variables, such as openness, institutional quality, corruption and indicators for good governance.
Keywords: European Cohesion Policy, policy effectiveness, economic growth, European Union
JEL Classification: F35, F36, O11, O40, O52, R58
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