布鲁盖尔-The-growth-effects-of-EU-cohesion-policy_-a-meta_23页_2mb

THE GROWTH EFFECTS OF EU COHESION POLICY: A META-ANALYSIS

Core Content

This paper presents a meta-analysis of the growth effects of EU Cohesion Policy, focusing on the role of Structural and Cohesion Funds in income convergence across European countries and regions. The analysis is based on a decade of data and draws on both theoretical models and empirical findings to evaluate the effectiveness of EU funds in promoting growth and reducing regional disparities.

Main Points

1. Regional Convergence Trends

• Income convergence is observed across European countries and regions over the last decade.
• σ-convergence indicates that income distribution has become more equitable over time.
• β-convergence shows that poorer regions grow faster than richer ones, aligning with neoclassical growth theory.
• However, within-country regional disparities are increasing, suggesting that convergence is not uniform across all levels of analysis.

2. Role of EU Cohesion Policy

• EU Cohesion Policy aims to promote "overall harmonious development" and reduce disparities between regions.
• It is not solely focused on income redistribution but on increasing investment returns in the periphery through collective goods like infrastructure, R&D, and skills.
• The policy is designed to complement market forces, which are not always sufficient to ensure convergence.

3. Effectiveness of Structural and Cohesion Funds

• The role of EU funds in growth convergence is unclear and inconclusive.
• Macroeconomic simulations tend to yield better results than empirical tests, indicating that the actual impact of these funds may not be fully realized.
• Possible reasons for limited effectiveness include:
  • Inefficient allocation
  • Poor management
  • Misuse for wrong investments

4. Policy Recommendations

• EU funds should be allocated based on capital efficiency to maximize growth effects.
• They should reinforce, not substitute, national redistribution schemes.
• Funds should be used to:
  • Compensate losers from market liberalization.
  • Ensure SMEs access local credit.
  • Support sectoral reallocation across the country or regions.
• Ex-ante institutional conditionality is important for the success of EU-funded investments.
• EU should prioritize funding countries over regions, especially in cases where national redistribution is effective.

5. Limitations of Income Convergence Analysis

• Standard income convergence analysis is insufficient to fully assess the effectiveness of EU cohesion spending.
• It should be combined with an evaluation of capital efficiency and qualitative assessments.
• The objective of EU Cohesion Policy is to raise the marginal efficiency of capital in the periphery, which is not captured by income convergence alone.

Key Findings

• EU countries and regions are converging in terms of income levels.
• National governments redistribute effectively across regions, regardless of fiscal centralization or decentralization.
• EU funds may not be fully realizing their potential due to inefficiencies in allocation, management, and investment choices.
• Convergence clubs or clusters exist, indicating that not all regions follow the same convergence path.
• EMU may have contributed to convergence in some countries, especially those with middle-income regions, by reducing exchange rate and default risks.

Conclusion

The paper concludes that while EU Cohesion Policy has played a role in promoting convergence at the country and regional levels, its growth-generating potential remains uncertain. The effectiveness of Structural and Cohesion Funds is influenced by institutional quality, capital efficiency, and investment type. To better align with the policy's goals, the allocation of funds should be conditioned on regional capital efficiency and institutional capacity, rather than on income levels alone. The future of EU cohesion policy should focus on growth-enhancing investments and supporting regional development through targeted and efficient mechanisms.