The impact of European Cohesion Policy in different contexts

ABSTRACT

The impact of European Cohesion Policy in different contexts. Regional Studies. Cohesion Policy, an important pillar of the European Union, has always been closely scrutinized and subject to debate because of the size of the budget and supranational role of the European Commission. Recent research has acknowledged that the impact of Cohesion Policy is far from uniform; academic interest has shifted away from attempts to assess its ‘total impact’ towards an emphasis on the ‘conditioning factors’ that explain where, when and how policy is effective. This provides insights that can contribute to policy design. The five papers in this thematic issue contribute to this research agenda by showing in what contexts and under what conditions Cohesion Policy can be more effective.

摘要

欧盟凝聚政策在不同脉络中的影响。Regional Studies. 作为欧盟的重要支柱，凝聚政策因其预算规模和欧盟委员会的跨国角色，不断受到仔细的检视与辩论。晚近的研究则认识到，凝聚政策的影响相当不均；学术兴趣则从尝试评估其“整体影响”，转变为强调解释政策于何处、何时、如何有效的 “条件因素”。此般取径对政策设计提供了洞见。此一主题文集中的五篇文章，藉由展现凝聚政策在什麽脉络与条件之下能够更为有效，对上述研究议程作出贡献。

RÉSUMÉ

L’impact de la politique européenne de cohésion dans divers contextes. Regional Studies. La politique de cohésion, un pilier important de l’Union européenne, a toujours été minutieusement examinée et a fait longtemps débat à cause de la taille du budget et vu le rôle supranational de la Commission européenne. Les dernières recherches ont reconnu que l’impact de la politique de cohésion est loin d’être uniforme; l’intérêt des chercheurs a passé des tentatives d’évaluer son ‘impact global’ pour mettre l’accent sur les ‘conditions essentielles’ qui expliquent où, quand et comment la politique est efficace. Cela apporte des aperçus qui peuvent contribuer à l’élaboration des politiques. Les cinq articles figurant dans ce numéro thématique contribuent à ce programme de recherches en montrant dans quels contextes et sous quelles conditions la politique de cohésion peut s’avérer plus efficace.

ZUSAMMENFASSUNG

Die Auswirkung der europäischen Kohäsionspolitik in verschiedenen Kontexten. Regional Studies. Die Kohäsionspolitik – eine wichtige Säule der Europäischen Union – war aufgrund ihres umfangreichen Etats und der supranationalen Rolle der Europäischen Kommission stets Gegenstand eingehender Untersuchungen und Debatten. In den jüngsten Studien wurde anerkannt, dass die Auswirkung der Kohäsionspolitik alles andere als einheitlich ausfällt. Das wissenschaftliche Interesse hat sich von den Versuchen der Einschätzung ihrer ‘Gesamtauswirkung’ hin zu einer Betonung der ‘konditionierenden Faktoren’ bewegt, die erläutern, wann, wo und wie politische Maßnahmen wirken. Dies ermöglicht Einblicke, die zur Ausgestaltung der Politik beitragen können. Die fünf Artikel dieser thematischen Ausgabe sind ein Beitrag zu diesem Forschungsbereich und zeigen, in welchen Kontexten und unter welchen Bedingungen die Kohäsionspolitik wirksamer sein kann.

RESUMEN

El impacto de la política europea de cohesión en diferentes contextos. Regional Studies. La política de cohesión, un importante pilar de la Unión Europea, ha sido siempre examinada minuciosamente y sujeta a debate debido al tamaño de su presupuesto y el papel supranacional de la Comisión Europea. En recientes estudios se ha reconocido que el impacto de la política de cohesión queda lejos de ser uniforme. El interés académico se ha alejado cada vez más de los intentos de evaluar su ‘impacto total’ poniendo énfasis en los ‘factores condicionantes’ que explican dónde, cuándo y cómo es eficaz la política. Esto aporta ideas que pueden contribuir al diseño de la política. Los cinco artículos en esta edición temática contribuyen a este programa de investigación y muestran en qué contextos y condiciones puede ser más eficaz la política de cohesión.

KEYWORDS:

• European Union
• Cohesion Policy
• Structural Funds
• regional growth
• policy impact

关键词:

• 欧盟
• 凝聚政策
• 结构基金
• 区域成长
• 政策影响

MOTS-CLÉS:

• Union européenne
• politique de cohésion
• Fonds structurels
• croissance régionale
• impact de la politique

SCHLÜSSELWÖRTER:

• Europäische Union
• Kohäsionspolitik
• Strukturfonds
• regionales Wachstum
• politische Auswirkungen

PALABRAS CLAVES:

• Unión Europea
• política de cohesión
• fondos estructurales
• crecimiento regional
• impacto político

JEL:

• R11
• R12
• R15
• R58

European Union regional and urban development policy, still commonly referred to as Cohesion Policy, has long been an important pillar of the European Union. The Directorate-General for Regional Policy was created in 1968, and the essence of the policy as it is now dates from the 1988 reform of the Structural Funds, which followed on from the 1986 Single European Act. Cohesion Policy is highly visible because it involves about one-third of the European Union budget. Moreover, in governance terms, it is unique. It is managed under a multilevel-governance model involving national governments, regional administrations and local communities under so-called ‘shared management’ with the European Commission.

Cohesion Policy has always been closely scrutinized and subject to much debate, largely because of the size of the budget and the supranational role of the European Commission in developing the policy agenda. It has also been the subject of many evaluations, which are undertaken for so-called Operational Programmes (which may be at national or regional level) at different points in the seven-year programming cycle. Indeed, Cohesion Policy has seen the emergence of an evaluation culture that is generally more sophisticated than that of domestically funded regional development policies. This is partly reflected in the large number of evaluation studies produced – in addition to the mid-term and ex post evaluations conducted on Operational Programmes, the European Commission also undertakes more ‘thematic’ studies and meta-evaluations which are wholly or partially in the public domain.¹

Besides the evaluations of Operational Programmes or specific themes and objectives conducted at the behest of the European Commission or required under the Treaty on the Functioning of the EU, Cohesion Policy has long attracted the attention of academics from different disciplines. Economists and political scientists, in particular, have sought to assess the extent to which Cohesion Policy has contributed towards the Lisbon Treaty objective of promoting economic, social and territorial cohesion (European Union, 2007). The earlier studies especially considered whether Cohesion Policy had succeeded in reducing disparities among the regions of the European Union. For instance, Leonardi (2006), using sigma- and beta-convergence, concluded that Cohesion Policy helped to reduce the socio-economic disparities between core and peripheral areas in Europe; by contrast, Boldrin and Canova (2001) maintained that there was no evidence of the Structural Funds having an impact on regional growth.

These discrepancies are not surprising since providing a general assessment of the impact of Cohesion Policy is not easy and involves a number of significant challenges (Fratesi, 2016). Among these is the fact that Cohesion Policy is, by definition, a multifaceted policy that seeks to address different economic and social objectives. In practice, however, it is often impossible to separate economic and social impacts with the data available. Even where the policy target is more precise, there are practical difficulties. For example, interventions in different policy fields can be expected to have impacts of different intensity and with different time lags, so that aggregate impacts can be misleading, since these are averages of different effects (Rodríguez-Pose & Fratesi, 2004).

It is also important to note that while the eligibility criteria are explicit (for instance, Objective 1, now termed less-developed regions, are defined as NUTS-2 regions with gross domestic product (GDP) (measured in purchasing power parities – PPS) per head of less than 75% of the European Union average), eligible regions qualify for very different levels of funding. This results from a combination of the funding formulae and the Council negotiations, so that even within Objective 1, the aid intensity can vary significantly (Crescenzi, 2009; Dotti, 2013). Furthermore, the principle of additionality, which requires Cohesion Policy to come ‘on top’ of national resources, is sometimes undermined as there is a strong incentive for governments to divert resources to other priorities where Cohesion Policy is focused on the least developed regions (Del Bo & Sirtori, 2016; Polverari, 2013). The picture is made more complex by the impacts of other policies, including those of the European Union itself, notably ‘competitiveness’ policies that tend to favour stronger areas to the detriment of weaker regions, adding to disturbance factors and threshold effects. Last, there are important technical issues in play, including data availability and the geographical scale at which the analysis should be conducted. In this context, the NUTS-2 level, at which eligibility and financial allocations are largely determined, may not be the appropriate level at which to capture policy effects using spatial econometric techniques.

Some recent analyses indicate an increasing impact of Cohesion Policy over time, with more impact in recent programming periods, partly attributed to policy learning mechanisms (Pinho, Varum, & Antunes, 2015; Rodríguez-Pose & Novak, 2013); however, evidence that Cohesion Policy has an impact is not, by itself, sufficiently useful. Indeed, given the large sums involved, some impact should be expected, at the very least on the demand side.

The available evidence in academic papers assessing the total impact of Cohesion Policy is acknowledged by European Union policy-makers (European Commission, 2014), but, in part because of the conflicting results of such analyses, these studies have had a limited impact on policy development. Moreover, the results of ex post evaluations for a given period are produced too late to have much, if any, direct impact on policy design in subsequent periods – for example, the ex post evaluations for 2007–13 were produced well after the regulatory frameworks for 2014–20 were in place and planning for the new period underway.² That said, more specific evaluations undertaken at the level of Operational Programmes and policy instruments can more readily feed into policy at national and subnational levels.

Recent research into the effect of Cohesion Policy has acknowledged that its impact is far from uniform; academic interest has shifted away from attempts to assess the ‘total impact’ of Cohesion Policy towards an emphasis on the ‘conditioning factors’ that explain where, when and how policy is effective. These factors include the quality of government, which increases the effectiveness of policies (Rodríguez-Pose & Garcilazo, 2015), the absorptive capacity of regions, as measured by the presence of human capital and good institutions (Becker, Egger, & Von Ehrlich, 2013), and the presence of territorial capital in the regions, which complements policy and can enhance its impact (Fratesi & Perucca, 2014).

This type of analysis is much more helpful for policy-makers as it provides information that can contribute to policy design. Indeed, knowing that some policies have a greater impact in certain contexts can provide a basis for more efficient use of funds. Similarly, knowing that the impact of certain policy measures is greater in the presence of certain territorial assets can facilitate the design and implementation of more comprehensive policies where complementarities are taken into account. The five papers selected for this thematic issue contribute to this research agenda by showing in what contexts and under what conditions Cohesion Policy can be more effective.

Dall’Erba and Fang (2015, in this issue) provide a meta-analysis of the wide literature on econometric estimates of the impact of European Union Structural Funds on regional growth. As already mentioned, the results of this literature are quite heterogeneous. However, the technique adopted in this paper makes it possible to identify why some studies detect a greater impact than others. Three types of ‘moderators’ of the results are studied: data characteristics, estimation methodology and the presence of regressors other than the Structural Funds. There are important factors within each of the three groups, but it is interesting to observe that the impact is larger in the following cases: studies adopting a sample smaller than the EU-12; studies investigating Objective 1 (now ‘less developed’) regions; and studies using a more recent sample. Importantly, however, three types of regressors related to the local context lead to significant differences in the primary estimates of impact, namely ‘human capital or investment in education or research and development (R&D)’, ‘corruption or institutional quality’ and ‘interaction terms’.

Percoco (2016, in this issue) uses a regression discontinuity design with heterogeneous treatment to demonstrate that the impact of Cohesion Policy depends on the economic structure of regions. In particular, using data for the 2000–06 programming period and focusing on Objective 1 regions (those most heavily assisted), the paper demonstrates that the impact of the policy is conditioned by regional specialization and, in particular, differs between regions according to the relative importance of the service sector in the economy. This evidence points to a decreasing impact of the service sector on regional growth – the higher the share of service sector activity, the lower the detected impact of policy investing heavily in this sector. In other words, Cohesion Policy has most impact in regions where the service sector is least developed. One possible explanation for this put forward by Percoco is that where the service sector is not well developed, its growth plays a supplementary role to the growth of other sectors.

Surubaru (2016, in this issue) adopts a different methodology; the paper relies on qualitative interviews and quantitative questionnaires with selected stakeholders to investigate the impact of administrative capacity on European Union policy implementation. Surubaru compares two countries, Romania and Bulgaria, which both joined the European Union in 2007, but which have shown significantly different levels of performance in the implementation of Cohesion Policy, as measured in terms of absorption of the funds. The paper shows that these differences are due to levels of administrative capacity, which are stronger in Bulgaria and where absorption has been significantly higher. The paper disaggregates administrative capacity into various components: institutional capacity, bureaucratic capacity, human resources capacity, political stability, political support and political clientelism. Surubaru shows that the key difference between the two countries is the level of political stability and support, which enabled Bulgaria to improve its administrative capacity and, hence, its ability to absorb funds.

Gagliardi and Percoco (2016, in this issue) focus on yet another aspect that might influence the impact of Cohesion Policy: the geographical characteristics or the settlement structure of regions receiving funds. The paper exploits a mild exogeneity in a regression discontinuity design due to the fact that the analysis is at NUTS-3 level, while eligibility for Objective 1 is at NUTS-2. For this reason, some NUTS-3 regions above the 75% GDP (PPS) per-capita threshold were eligible for Objective 1, despite their comparatively favourable economic situation and are, hence, defined by the authors as ‘accidental winners’. The interesting result of the analysis concerns the different impact of Cohesion Policy depending on the settlement structure of regions. The paper finds that Cohesion Policy enhances regional growth overall, but does so more significantly in the case of rural regions close to a city. This suggests that these regions can exploit the availability of space to accommodate new activities and the closeness to the agglomeration economies of core urban areas, but without incurring congestion costs.

Lastly, Giordano’s (2016, in this issue) paper comes from the Policy Debates section of the journal. In it, the role of Cohesion Policy, and in particular the European Regional Development Fund (ERDF), is assessed in relation to the geographical features of regions in three countries: Spain, Sweden and Denmark. The paper analyses three case studies, two relating to sparsely populated regions and the third concerning an island region. These regions are interesting because they are a ‘privileged category’ to the extent that European legislation recognizes the existence of permanent structural handicaps in the development of some regions, yet the ‘place-based’ focus of Cohesion Policy has encouraged the consideration of such specificities as ‘assets’ rather than ‘handicaps’. The approach in this paper is qualitative, using semi-structured interviews triangulated with secondary sources. Here, too, it is argued that geographical specificities matter, in particular remoteness (or peripherality) and settlement patterns. Areas with particular characteristics may be disadvantaged by Cohesion Policy to the extent that Operational Programmes cover NUTS-2 regions while geographical specificities may be present at lower levels of disaggregation and, therefore, not fully taken into account. Nevertheless, the ERDF is considered to have contributed to economic development in all three places and was considered ‘vital’ in some situations, but also illustrative of the scope to exploit geographical specificities as assets, notably in relation to cultural tourism and renewable energy.

In conclusion, the five papers in this thematic issue emphasize the importance of the context in determining the impact of Cohesion Policy, especially in relation to economic and geographical structure, as well as administrative capacity. Such assessments, which link the impact of Cohesion Policy to specific determinants, are more useful than those that limit themselves to the quantification of impacts. Indeed, these analyses have the capacity to inform policy decisions as they begin to identify the conditions under which Cohesion Policy is effective, and potentially the circumstances in which it could be made more so.

Notes

1. See http://ec.europa.eu/regional_policy/en/information/publications/.

2. These were mainly begun in 2014 and published in 2016.