Prof. Francesco Pigliaru (p)

Over the last decades, European Union cohesion policy has been shaped by the principles of place-based policies, with outcomes often seen as falling short of expectations. The post-pandemic response has introduced a more centralized governance design (e.g., NGEU), reopening the debate on which institutional architecture is best suited to sustain territorial convergence. This paper situates that debate in the context of the rapid advance of generative AI, which may raise productivity in automatable tasks while simultaneously reshaping the economic value of human skills in tasks that remain non-automatable.
To study these changes, we adopt a task-based framework due to Jones and Tonetti (2026) inspired by the “weak links” logic of O-ring production (Kremer, 1993): production processes are made of many complementary tasks, with a low elasticity of substitution across tasks. Put differently, tasks are not easily replaceable with one another: weak performance in some steps can drag down aggregate output even when other steps are highly efficient. Within each task, however, technology (capital/AI) and human labour are perfect substitutes: a task is performed by whichever input delivers it at lower cost, and advances in AI tend to expand the set of tasks for which technology is economically viable.
In this setting, territorial heterogeneity—human capital, institutional quality, innovative capacity, and adoption capabilities—can generate different trajectories both in the speed at which territories automate “automatable” tasks and in the productivity of tasks that remain structurally human. As a result, AI can trigger convergence or divergence dynamics: on the one hand, automation may relax bottlenecks; on the other, it may increase the relative weight of non-automatable tasks, making deficits in skills and organization more damaging in lagging territories.
The paper’s contribution is to clarify the mechanisms through which AI may widen or narrow regional gaps and to discuss the implications for policy design: when the priority should be strengthening local adoption capabilities and skills in residual tasks, and when more centralized coordination may be more effective in preserving the goal of territorial cohesion.

Prof. Roberta Arbolino (p), Dr Raffaele Boffardi, Prof. Paolo Di Caro, Prof. Marco Martorana

Raising geopolitical threats and economic linkages can influence the effectiveness of regional development policies with geographical differences. We construct novel trade-adjusted measures of exposure to geopolitical risk for the European regions and present evidence on the changes of cohesion policy impact driven by geopolitical issues over the past two decades. Our findings indicate that the adverse effects of geopolitical risk on cohesion policy effectiveness vary across and within European countries. Territorial divergences are explained by differences in regional positioning in global value chains and foreign direct investments. Policy implications are finally discussed.

Dr. Julia Bachtrögler-Unger (p)

This reflection paper examines the influence of administrative capacity on the absorption and effective use of Cohesion Policy funds. First, it examines the current level of absorption of Cohesion Policy funds in the 2014-2020 programming period. Second, a literature review on the relationship between administrative capacity and the absorption of Cohesion Policy funds highlights the factors affecting the availability of administrative resources. Third, the role of administrative capacity for the effectiveness of funds usage in EU regions is discussed.
The literature concludes that the effects of Cohesion Policy are heterogeneous across regions. Administrative capacity is an important element of a region's absorptive capacity, also due to the project selection process through managing authorities. Therefore, measures should be taken to attract motivated and well-qualified staff and to ensure communication and coordination with stakeholders and other relevant bodies. Finally, a recent study on regional development opportunities of green and digital technologies is presented, pointing to the knowledge of administrative staff about regional characteristics and capabilities as essential contribution to "good" policy implementation.

Dr. Debora Gambina (p), Prof. Fabio Mazzola (p)

This work investigates the drivers of time-efficient execution of projects financed under the NGEU in the Italian case. Drawing on project-level data from the ItaliaDomani and OpenPNRR databases and employing survival analysis techniques, we examine the effects of regional context factors on project execution time. Moreover, we assess whether centralized or decentralized implementation is associated with faster execution and explore potential non-linear impact of institutional quality according to the different implementing bodies. In addition, we consider project-level characteristics including co-financing with other funding sources. Our main results indicate that territorial features play a crucial role in explaining time efficiency. In particular, institutional quality, development level and agglomeration economies emerge as key determinants, alongside centralized project implementation especially in regions with weaker institutional capacity. These findings may provide ex-ante insights into the effectiveness of NGEU and offer policy implications for the design of the 2028-34 EU cohesion policy.