A quantitative evaluation of EU and national cohesion policies

Abstract

Since the Treaty of Rome (1957) EU funds have been devoted to rebalancing regional economic and social disparities. Today more than ever, it does not seem feasible to advance towards a closer integration of the European Union, without favouring a greater economic and social cohesion between its countries. Yet, there are still very deep economic and social disparities both between countries and between regions that compose the Union, undermining its unity and cohesion. In order to rebalance these disparities, the EC Member States have developed a unitary strategy, namely the European Cohesion Policy, which has taken through different configurations according to the economic and political environment, the member states priorities, the financial resources, the past governance experience. In any case, the need to evaluate the appropriateness and effectiveness of development policies implemented through this powerful tool cannot be underestimated. For the new programming period (2021-2027), an amount of € 330.2 billion has been allocated in Europe for this policy, almost one third (30.7%) of the total budget of the European Union (€ 1,074.3 billion Euro net of Next Generation EU). See https://www.consilium.europa.eu/it/policies/the-eubudget/ long-term-eu-budget-2021-2027/. The analysis of Cohesion Policy is very complex considering the different regional, multiregional and interregional programmes. There is an abundant and sophisticated literature on the effectiveness of EU Cohesion policy urged by the size of the budget and the critical role of the multilevel governance of development programmes. In most cases, this policy seems to have a positive impact on growth, but the significance of the results is far from uniform. A feature that emerges across various studies is that the policy impact depends on a series of conditioning factors (see Fratesi, 2016). Indeed, recent contributions pay attention to the relevance of some conditioning variables such as the quality of institutions – which positively affect Structural Funds effectiveness -, the expenditure typology – suggesting that investment in education and human capital are more viable for economic growth -, the territorial endowment in private, public, physical, and immaterial capital. The endowment of public capital is considered among the most relevant factors impacting the growth process (Romp and De Haan, 2007). In that perspective, the Cohesion policy aiming to rebalance regional and social disparities, is largely involved in co-financing major infrastructure projects. Furthermore, the Cohesion policy effectiveness is improved by regional infrastructural endowment (Crescenzi and Giua (2016), Fratesi and Perucca (2014)). Therefore, investment flows in infrastructure should positively impact on social and economic wellness while the public capital stock should enhance EU action to development objectives, generating a virtuous circle. However, the efficiency of spending in public capital is not homogeneous, and the virtuous circle may be broken if the government cumulative investments – which is the basis of the Perpetual Inventory Method (PIM) used to measure the public capital in monetary terms – do not correspond to equivalent physical infrastructure due to waste, corruption, or other forms of inefficiency. Inspired by Golden and Picci (2005a) who define the difference among the public capital in monetary terms and the public capital in physical terms (controlled for cost differences in infrastructure construction) a measure of corruption, “indicating waste, fraud, and mismanagement in the public contracting process”, we investigate in Chapter 2 of the thesis the sectoral efficiency public spending across the Italian regions. ... [edited by Author]