Fertile Soil for Structural Funds? A Panel Data Analysis of the Conditional Effectiveness of European Cohesion Policy

26 Pages Posted: 8 May 2006

See all articles by Sjef Ederveen

Sjef Ederveen

CPB Netherlands Bureau of Economic Policy Analysis

Henri L. F. de Groot

VU University Amsterdam - Department of Spatial Economics; Tinbergen Institute

Richard Nahuis

CPB Netherlands Bureau of Economic Policy Analysis (Deceased)

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Abstract

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 a 'proper' institutional framework, 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. It is robust to a wide range of robustness tests.

Suggested Citation

Ederveen, Sjef and de Groot, Henri L.F. and Nahuis, Richard, Fertile Soil for Structural Funds? A Panel Data Analysis of the Conditional Effectiveness of European Cohesion Policy. Kyklos, Vol. 59, No. 1, pp. 17-42, February 2006. Available at SSRN: https://ssrn.com/abstract=881885 or http://dx.doi.org/10.1111/j.1467-6435.2006.00318.x

Sjef Ederveen (Contact Author)

CPB Netherlands Bureau of Economic Policy Analysis ( email )

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Henri L.F. De Groot

VU University Amsterdam - Department of Spatial Economics ( email )

De Boelelaan 1105
Amsterdam, 1081 HV
Netherlands
+31 20 598 6168 (Phone)
+31 20 598 6004 (Fax)

Tinbergen Institute

Gustav Mahlerplein 17
Amsterdam, 1082 MS
Netherlands

Richard Nahuis

CPB Netherlands Bureau of Economic Policy Analysis (Deceased)

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