Regional and agricultural policies in the EU budget: working for EU territorial

cohesion?

Riccardo Crescenzi Fabio Pierangeli

U.R. Università Roma Tre

• Research questions & Objectives• EU funds and the regions• Dataset:

– Data coverage and availability – Units of analysis

• Preliminary results

OUTLINE

Research hypothesesThe existing literature has observed a lack of upward mobility of Objective 1 regions and the absence of convergence across EU regions (e.g. Boldrin and Canova 2001);

suggested the implementation of inappropriate policies as an explanation of the weak impact of the EU funds convergence (Cappelen et al. 2003; Rodriguez-Pose and Fratesi 2004; Schucksmith, Thomson, Roberts 2003)

BUTcounterfactual scenario hard to construct

CONSEQUENTLY

We focus our attention upon the à priori structure of policies rather than upon their impact

Objectives (1) Investigate two potential explanations for the weak

impact of EU policies on territorial cohesion and convergence:

• à priori bias in the geographical allocation of the funds– undermines the principle of concentration – prevents the intervention from targeting the real

sources of competitive disadvantage of EU regions

• inconsistent\conflicting distribution of resources under different EU policies

Objectives (2)By looking at the EU expenditure for the CAP and EU Regional Policy (and its evolution over time) the paper will test:

• Potential inconsistencies\conflicts in the regional allocation of the funds(correlation between regional expenditure under different policy headings)

• Coherence with the principle of territorial concentration(spatial structure of the funding distribution)

• Capability to work pro-cohesion(Correlation with structural disadvantage)

• Influence of political factors(Correlation with proxies for regional bargaining power)

•Policy areas: • CAP:

• First pillar • Second pillar

• Regional policy•Geographical coverage: EU-15

Regional level: • NUTS1 (Be, De, UK)

• NUTS2 (At, Fi, Fr, Gr, It, Nl, Pt, Es, Se)

•Time span: 1994-1999; 2000-2006; 2007-2013

DATASET: policy areas, spatial scale, time span

Potential inconsistencies\conflicts in the regional allocation of the funds

(correlation between regional expenditure under different policy headings)

First Pillar: Germany

•Coherence with the principle of territorial concentration

(spatial structure of the funding distribution)

Coef. P>|t| National Dummies R-SqSocio-Economic Disadvantage

Politiche Regionali 94-99 -293.011 0.009 Y 0.8068Politiche Regionali 00-06 -426.7528 0.008 Y 0.8227Politiche Regionali 07-13 -373.7815 0.006 Y 0.7795

Sviluppo Rurale 94-99 -78.76871 0.031 Y 0.4798Sviluppo Rurale 00-06 -186.2637 0.034 Y 0.5989Sviluppo Rurale 07-13 -128.0556 0.042 Y 0.5618

•Capability to work pro-cohesion(Correlation with structural disadvantage)

-500

05

001

000

150

0

0 10000 20000 30000 40000Yt0_1995

Res Reg Policy 1994 Res Reg Policy 2000Res Reg Policy 2007

Regional Policy - Bargaining Component

•Influence of political factors(Correlation with proxies for regional bargaining power)

-500

05

001

000

150

0

0 10000 20000 30000 40000Yt0_1995

Res Rur Dev 1994 Res Rur Dev 2000Res Rur Dev 2007

Rural Development - Bargaining Component

•Influence of political factors(Correlation with proxies for regional bargaining power)

-100

00

100

02

000

300

0

0 10000 20000 30000 40000Yt0_1995

Res First Pillar 1994 Res First Pillar 2000Res First Pillar 2007

PAC First Pillar - Bargaining Component

•Influence of political factors(Correlation with proxies for regional bargaining power)

Explaining the ‘bargaining premium”

• Alternative explanations in the Political Economy literature:– Administrative efficiency and governance– Party Politics– Devolution