Abstract
Although the EU structural funds aim to alleviate disparities through supporting regional development, their impact on local economies and societies is considered as uneven. As existing studies explore the absorption rate of the EU share of contribution as a point-in-time indicator at the end of the policy cycle, evidence about regional co-finance and the factors dynamically affecting absorption performance is lacking. To that end, this paper aims to provide a new longitudinal investigation of the absorption time series and develop an original indicator, supported by a statistical error analysis, for offering a transparent view of the total funds’ absorption. The analysis highlights that undesired regional strategies due to low administrative capacity may increase the absorption rate, though without supporting regional growth. The proposed approach could further facilitate the equitable allocation of political accountability regarding the structural funds’ absorption to the EU and the regions. Overall, it is anticipated that this research will support the EU in monitoring actual regional performance for prompting local managing authorities to improve their administrative capacity.
Highlights
Cohesion policy (CP) constitutes the main, and probably the largest, European Union (EU) project funding scheme (Percoco 2017)
The certified expenditure constitutes the total amount of EU and regional payments that the region initially approves. This value may: (i) include the local managing authorities’ (LMAs)’ overbooking practice (OpenCoesione 2019) or (ii) not report the EU pre-finance in the initial years of the policy cycle (European Commission 2006)
According to the expenditure analysis, the actual LMA performance exhibits complex dynamics that cannot be evaluated through a point-in-time indicator at the end of the policy cycle that reflects only that cannot be evaluated through a point-in-time indicator at the end of the policy cycle that reflects the EU share of contribution
Summary
Cohesion policy (CP) constitutes the main, and probably the largest, European Union (EU) project funding scheme (Percoco 2017). To the best of our knowledge, extant research on LMA performance focuses either on related theoretical aspects (Zaman and Cristea 2011; Mike and Balás 2015) or on quantitative ones, which usually base their reasoning on the funds’ absorption rate at the end of the programming period (Cace et al 2011; Tosun 2014) This indicator is commonly used by policy-makers and the media to inform citizens about the national/regional performance within the CP. To provide a comprehensive analysis, we study two differentiated (in terms of development) regions of the same country to capture the difficulty of the current absorption indicator in grasping reality properly In this direction, we lay the foundations of a new longitudinal approach, as a first effort in the literature, towards exploring LMA performance in a novel fashion. We conclude with a discussion of the major insights, implications, and future research directions
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