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Fertile Soil for Structural Funds?A Panel Data Analysis of the Conditional Effectiveness of European Cohesion Policy
Author(s) -
Ederveen Sjef,
Groot Henri L.F.,
Nahuis Richard
Publication year - 2006
Publication title -
kyklos
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.766
H-Index - 58
eISSN - 1467-6435
pISSN - 0023-5962
DOI - 10.1111/j.1467-6435.2006.00318.x
Subject(s) - openness to experience , european union , cohesion (chemistry) , panel data , robustness (evolution) , corporate governance , economics , convergence (economics) , business , econometrics , public economics , accounting , macroeconomics , economic policy , finance , psychology , social psychology , biochemistry , chemistry , organic chemistry , gene
SUMMARY Structural Funds are the most intensively used policy instrument by the European Union to promote economic growth in its member states and to speed up the process of convergence. This paper empirically explores the effectiveness of European Structural Funds by means of a panel data analysis for 13 countries in the European Union. We show that – on average – Structural Funds are ineffective. For countries with a ‘proper’ institutional framework, however, Structural Funds are effective. The latter result is obtained for a wide range of conditioning variables, such as openness, institutional quality, corruption and indicators for good governance. It is robust to a wide range of robustness tests.