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European Regional Structural Funds: How Large is the Influence of Politics on the Allocation Process?
Author(s) -
BOUVET FLORENCE,
DALL'ERBA SANDY
Publication year - 2010
Publication title -
jcms: journal of common market studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.54
H-Index - 90
eISSN - 1468-5965
pISSN - 0021-9886
DOI - 10.1111/j.1468-5965.2010.02062.x
Subject(s) - tobit model , cohesion (chemistry) , politics , corporate governance , economics , european union , economic system , public economics , finance , econometrics , political science , economic policy , chemistry , organic chemistry , law
The allocation of Structural Funds, the most important component of the European Union (EU) cohesion policy, is subject to intense bargaining between national governments and across layers of political governance. Using Structural Funds data for each cohesion objective over 1989–99, we examine which variables, economic and political, determine the actual funds allocation. We test our hypotheses with a Tobit model that accounts for the two‐stage allocation process and our limited dependent variables. Our results indicate that economic criteria are not the only determinants of funds allocation. Indeed, we find that the political situation within a country and a region and the relations between various layers of governance influence the allocation process. This article is also the only study to measure the impact of additional funds provided by the region or the country itself, and to differentiate the analysis by cohesion objective.