Eleonora Cutrini (p)

The European Union (EU) is committed to pursue a socially and territorially balanced economic development. Nevertheless, after the overall convergence that characterized the period before the global financial crisis, polarization within the EU have started to increase in recent years. In this context, the characteristics ensuring regional resilience were investigated (Martin, 2012; Martin et al., 2016) and the emphasis was put on idiosyncratic vulnerability in the absence of a common automatic fiscal stabilization mechanism (Fingleton et al., 2015) as well as on heterogeneous structural changes (O'Leary and Webber, 2015). In a recent work on club convergence we provide evidence that European regions are scattered in five separate groups and that the divergence among clusters is explained well by their diverging structural change paths. Particularly, specialization in high-productivity service activities and a solid manufacturing base both enhance growth in predominantly urban regions and in the EU manufacturing core. Conversely, services that use low skills intensively are less relevant for regional development or even deteriorate growth prospects (Cutrini, 2019).
Although economic structure is important, it is deemed to be just a part of the explanation. Not surprisingly there is a rapidly growing literature on the role of institutional quality to explain regional resilience to shocks. One reason behind this trend is the availability of data.
In the context of this debate and sharing the view that good institutions make a difference for regional development (See, among others, Rodríguez-Pose, 2013; Ezcurra and Rios, 2019), the present analysis aims to investigate the role of the “quality of government” – that is “how the public sector operates in a territory”, together with other fundamental drivers such as economic structure and human capital.
Our preliminary results confirm previous works that established the positive role of institutions for regional growth and resilience (Farole et al., 2011; Rodriguez-Pose 2013; Rodríguez-Pose and Garcilazo, 2015, Ezcurra and Rios, 2019; Rios and Gianmoena, 2019 among others). We also provide robustness checks considering different groups of countries and categories of regions (urban/rural), we do not find significant differences but the quality of government appears as slightly more important for lagging-behind regions.
If further confirmed, this evidence could have obvious policy implications for a more efficient management of structural funds.

Philippe Monfort (p)

Before the economic crisis which started in 2008, the EU was nicknamed "convergence machine" as disparities among EU regions were significantly decreasing. The crisis had a deep impact of economic and social cohesion in the EU and the surge in disparities is now frequently cited as a main cause for the current lack of popular support to the project of constructing the European Union.

The issue of regional disparities is therefore as relevant as ever and this paper intends to provide an update analysis of their recent trends. It relies on a battery of instruments and methods to take the pulse of the convergence process among EU regions, both at EU and Member Sates level, taking a long term perspective when possible and comparing the EU with other places in the world.

The paper comes to three key conclusions. First, the crisis stopped convergence within the EU-28 where the level of disparities is more or less stable since 2008. Second, disparities are increasing within many Member States. Third, the impact of the crisis has been long-lasting as convergence has not restarted despite a sustained economic recovery. This is worrying as the EU as whole has recovered from the crisis, but the convergence process has not.

Ioannis Psycharis (p), Vassilis Tselios , Panayotis Pantazis

The aim of this paper is to examine the impact of cohesion funds and national public investment in ameliorating income inequalities among income groups in Greece. Given that inclusive growth has become one of the main policy priorities of the EU, this paper examines empirically the contribution of cohesion funds and nationally funded public investment to income disparities in Greece. The analysis is based on a novel database that contains statistical data on cohesion funds and pubic investment on the one hand and declared income by households in Greece over the period 2000-2015. Analysis has been conducted at NUTS III geographical level. The paper employs descriptive and thematic cartography analysis along with panel data econometric analysis techniques. Results indicate that cohesion funds show a statistically significant impact on reducing income inequalities. However, this impact is sensitive to the type of cohesion funds giving prominent role to the spending on human capital and research.