Abstract

Growing Euroscepticism across the European Union (EU) leaves open questions as to what citizens expect to gain from EU Membership and what influences their dissent for EU integration. This paper looks at the EU Structural Funds, one of the largest and most visible expenditure items in the EU budget, to test their impact on electoral support for the EU. By leveraging the Referendum on Brexit held in the United Kingdom, a spatial RDD analysis offers causal evidence that EU money does not influence citizens’ support for the EU. Conversely, the analysis shows that EU funds mitigate Euroscepticism only where they are coupled with tangible improvements in local labour market conditions, the ultimate objective of this form of EU intervention. Money cannot buy love for the EU, but its capacity to generate new local opportunities certainly can.

Highlights

  • The European Union (EU) is increasingly seen by its detractors as distant from the real day-to-day economic challenges of its citizens and as a binding constraint to the capacity of national governments to deliver a more equitable distribution of prosperity

  • This paper has investigated the extent to which Eurosceptic voting preferences can be influenced by EU policies

  • It leverages the case of the EU Structural Funds, the key EU policy tool targeting employment and economic opportunities; i.e. the same economic challenges that have been linked to the world-wide rise of anti-system electoral preferences

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Summary

Introduction

The European Union (EU) is increasingly seen by its detractors as distant from the real day-to-day economic challenges of its citizens and as a binding constraint to the capacity of national governments to deliver a more equitable distribution of prosperity. In line with the literature assigning a key role to socioeconomic dynamics in shaping Eurosceptic and populistic votes (Colantone and Stanig, 2018; Rodríguez-Pose, 2018; Guiso et al, 2017), our evidence supports the idea that the economic dynamism of local areas mediates the role of EU Structural Funds for Eurosceptic preferences Taken together, these results indicate that voting preferences of citizens are not responsive to EU financial assistance, unless EU interventions are capable of promoting tangible improvements in their daily life, such as new employment opportunities. The mixed evidence emerging from these recent studies leaves the issue of whether areas receiving higher proportions of EU Structural Funds develop a more favourable view of Europe because of EU financial help still unsolved This literature is silent on whether the effect of EU funding on public support towards the EU materialises under key conditions in place in the territories where public investment through Cohesion Policy takes place.

EU Cohesion Policy in the UK at the time of the Brexit Referendum
Wales as a case-study
Identification strategy and empirical models
Balancing test
ATE and H-ATE estimates
Robustness checks
Discussion
Conclusions
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