Marco Di Cataldo, Vassilis Monastiriotis (p)

Katharina Heisig

With the prospective exit of the UK from the European Union, a crucial question is whether EU Structural Funds have been beneficial for the country and which aspects of Cohesion Policy should be maintained if EU funds are to be replaced. This paper addresses this question through a twofold investigation, assessing not only whether but also how EU funds have contributed to regional growth in the UK over three programming periods from 1994 to 2013. We document a significant and robust effect of Cohesion Policy in the UK, with higher proportions of Structural Funds associated to higher economic growth both on the whole and particularly in the less developed regions of the country. In addition, we show that the strategic orientation of investments also plays a distinct role for regional growth. While concentration of investments on specific pillars seems to have no direct growth effects, suggesting the presence of synergies of spending across investment categories, we unveil clear evidence that targeting of investment efforts on specific areas of relative regional need has a significant and autonomous effect on growth. These findings have important implications for the design of place-based policy interventions in the post-Brexit Britain.

Pierre Maurice Reverberi (p), Cristina Brasili

Vassilis Monastiriotis

This study provides an empirical analysis to test the effectiveness of EU Cohesion Policy in promoting social cohesion. Using data from the EU-SILC survey, it is shown that differentiated patterns of inequality are at work across European countries and that Cohesion Policy expenditure is found to reduce inequality in personal income levels, an effect which is amplified by quality of institutions but only for specific segments of the beneficiary population. The two-way fixed effects estimation finds also evidence for a U-shaped relationship between economic development and inequality and a negative association of the latter with decentralization and globalization.

Katharina Heisig (p), Mirko Titze, Walter Hyll

Riccardo Crescenzi

The European Union provides substantial financial transfers to regions lagging behind in economic development. Previous research often shows a positive link between fiscal transfers and attitudes towards further European integration. However, results cannot be interpreted as causal. We therefore want to study whether there is a causal effect of fiscal transfers on support for the EU. We apply a fuzzy regression-discontinuity design in a similar setting as Becker et al. (2010) by exploiting the discrete jump in the probability of receiving structural funds at the 75% threshold.