Rural regions close to a city benefit more from EU Cohesion Policy

EU Cohesion Policy contributes to regional growth by about 1%. The effect is higher in rural regions close to a city (+1.6%). Those are the results of a paper co-authored with Luisa Gagliardi and titled “The impact of European cohesion policy in urban and rural regions: a regression-discontinuity approach”.


Abstract: There is an extensive literature on the impact of the European Cohesion Policy on the economic performace of targeted areas. Despite that, its effectiveness remains controversial. Thispaper investigates whether the policy has supported the economic performance of the most disadvantaged European areas (Objective 1 regions) exploiting its heterogeneous impact within each NUTS2 region. Performing the empirical investigation at a lower geographical level of analysis and focusing on different spatial unit subject to homogeneous treatment status in acontext of a Regression Discontinuity Design (RDD), the paper provides reliable empirical evidence on the impact of the policy coupled by  novel findings on the spatial heterogeneity emerging within each NUTS2 region. Results show that the European Cohesion funds contributedpositively to generate economic growth in lagging areas, but their effect is mainly driven by the successful performance of rural areas close to main urban agglomerates. Favourable geography and the progressive suburbanization of the rural landscape created new opportunities for rural areas close to cities boosting the effect of the policy.



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