Two papers on the effectiveness of European Cohesion Policy have been recently accepted for publication in the “Regional Studies” journal:
“The Impact of the European Cohesion Policy in Urban and Rural Regions” (joint with Luisa Gagliardi)
This paper develops an evaluation exercise of impact of the European Cohesion Policy on the economic performance of the most disadvantaged European areas (Objective 1 regions) for the programming period 2000-2006. By performing the analysis at NUTS3 rather than NUTS2 level to exploit the exogeneity of the treatment status in the context of a Regression Discontinuity Design (RDD), the paper shows that the European Cohesion funds have positively contributed to generating economic growth in lagging areas. However, 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, thus boosting the effect of the policy.
“The Impact of European Cohesion Policy on regional growth: does local economic structure matter?”
A growing body of literature has analysed the effect of European cohesion policy on regional GDP growth. This paper contributes to this literature by discussing structural funds and assigning an explicit role to the choice of strategy and to the economic structure of regions. In particular, adopting a regression discontinuity design with heterogeneous treatment and using data on NUTS 3 regions makes it possible to identify the causal impact of structural funds on regional growth according to the size of the service sector, a sector that accounts for a large share of total structural funds expenditure. The paper shows that the larger the sector, the greater the amount of financial resources directed to services and the slower growth is. The interpretation pertaining to policy implications is that higher growth rates can be obtained by promoting the service sector at its early stages, i.e., when it is comparatively small and its potential for productivity growth is higher.