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The Political Economy of EU-funds: Evidence from Poland

Author

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  • Banaszewska Monika

    (Department of Public Finance, Poznań University of Economics and Business, al. Niepodległości 10, 61-875Poznań, Poland)

  • Bischoff Ivo

    (Department of Economics, University of Kassel, Nora-Platiel-Strasse 4, 34109Kassel, Germany)

Abstract

We provide an empirical study analysing the distribution of EU funds among 2478 Polish municipalities in the period 2007–2011. EU funds are found to be concentrated in smaller municipalities and economically weak sub-regions, and do not increase in the municipalities’ fiscal capacity. Our primary focus rests on the question whether regional governments follow their own political self-interest when allocating EU funds even though national parties only play a minor role in Polish local politics and thus the conventional logic of supporting aligned governments does not apply. Difference-in-difference estimations show that the answer is affirmative: Municipalities whose voters are aligned with the regional government receive more EU funds per capita than non-aligned municipalities. Furthermore, we find support for the swing-district hypothesis: EU funds per capita decrease in the vote-share differential between the two leading parties.

Suggested Citation

  • Banaszewska Monika & Bischoff Ivo, 2017. "The Political Economy of EU-funds: Evidence from Poland," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 237(3), pages 191-224, June.
    • Handle: RePEc:jns:jbstat:v:237:y:2017:i:3:p:191-224:n:2
    DOI: 10.1515/jbnst-2017-1105
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    Cited by:

    1. Agnieszka Kozera & Aldona Standar & Natalia Genstwa, 2023. "Are Most Polluted Regions Most Active in Energy Transition Processes? A Case Study of Polish Regions Acquiring EU Funds for Local Investments in Renewable Energy Sources," Energies, MDPI, vol. 16(22), pages 1-27, November.
    2. Matuszak Piotr & Totleben Bartosz & Piątek Dawid, 2022. "Political alignment and the allocation of the COVID-19 response funds—evidence from municipalities in Poland," Economics and Business Review, Sciendo, vol. 8(1), pages 50-71, April.
    3. Banaszewska, Monika & Bischoff, Ivo & Bode, Eva & Chodakowska, Aneta, 2022. "Does inter-municipal cooperation help improve local economic performance? – Evidence from Poland," Regional Science and Urban Economics, Elsevier, vol. 92(C).
    4. Ivo Bischoff & Julia Hauschildt, 2019. "Vocational schools as an instrument of interregional competition—Empirical evidence from German counties [Berufsschulen als Instrument im interregionalen Wettbewerb – Ergebnisse einer Analyse für d," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 39(1), pages 65-89, February.
    5. Banaszewska, Monika & Bischoff, Ivo, 2021. "Grants-in-aid and election outcomes in recipient jurisdictions: The impact of EU funds on mayoral elections in Poland," European Journal of Political Economy, Elsevier, vol. 68(C).
    6. Monika Banaszewska & Ivo Bischoff, 2018. "Grants-in-aid and the prospect of re-election: The impact of EU funds on mayoral elections in Poland," MAGKS Papers on Economics 201822, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    7. Aldona Standar & Agnieszka Kozera & Łukasz Satoła, 2021. "The Importance of Local Investments Co-Financed by the European Union in the Field of Renewable Energy Sources in Rural Areas of Poland," Energies, MDPI, vol. 14(2), pages 1-23, January.

    More about this item

    Keywords

    EU; cohesion funds; Poland; local government; party alignment; swing districts; vertical grants;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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