Structural funds and the economic divide in Italy

Abstract

This paper aims to provide a contribution to the debate on the effectiveness of cohesion policies in Italy. The focus is on the territorial effects of EU spending from 1996 to 2007. The empirical analysis is based on the estimate of an expanded neoclassical growth model in which the Structural Funds are one of the variables that explain the convergence across Italian regions. Using panel data and a dynamic panel estimator we find that the Structural Funds, even having had a greater impact in the South compared to the Centre-North, have not contributed to reduce the economic divide in Italy.

The Impact of Institutional Quality and Efficient Cohesion Investments on Economic Growth Evidence from Italian Regions

“…Due to the economic crisis, Cohesion policy has been reformed to achieve short-term objectives and help countries to react faster to the recession [5]. Despite the support of EU funds, according to the main economic data [3], Italian regional gaps have increased, also because of the different impacts of public investments among the regions [6].…”

“…Some scholars argue that Structural funds have had a greater impact in the South than in the Centre-North, but without reducing the gap in Italian productivity [6]. Some others eschew an idea of a uniform approach to regional development, recognizing the need to develop interventions tailored to the contexts and needs of specific countries [52] and regions [53,54].…”

Economic performance of the NUTS III Regions in the Czech Republic in the context of entrepreneurship subsidies from the EU Structural Funds

“…Studies focused on the efficiency of the impact of structural funds have not provided conclusive findings so far (e.g., Garcia-Milà and McGuire, 2001;Rodríguez-Pose and Fratesi, 2004;Dall'erba and Le Gallo, 2008;Lima and Cardenete, 2008;Ionescu and Tudor, 2011;Aiello and Pupo, 2012). The short-run positive relationship between subsidies from EU Structural Funds and regional economic growth report is reported by, for instance, Eggert et al (2007).…”

“…De La Fuente (2002) also mentions a benefit in the area of regional growth (positive effect on GDP per capita) and employment rate. Aiello and Pupo (2012) present a limited effect on the GDP per capita of Italian regions. They found no effect on a labour productivity.…”

“…To support our assumption, we test redundant fixed effects using Likelihood Ratio and the Hausman test the fixed effects are considered to be the most appropriate. Fixed effects also help us to deal with unobserved heterogeneity and they were also employed in the studies by Mohl and Hagen (2008) or Aiello and Pupo (2012). To avoid problems resulting from autocorrelation and heteroscedasticity, we estimate models with white cross-section standard errors & covariance (d.f.…”