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Rationing methods for allocating the European Union’s rural development funds in Poland

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  • Vito Fragnelli

    (University of Eastern Piedmont)

  • Ewa Kiryluk-Dryjska

    (Poznań University of Life Sciences)

Abstract

In this paper, we evaluate the applicability of the bankruptcy and the relevance factors methods to the allocation of structural policy budgets using Polish Rural Development Program as a practical example. Our results demonstrate that the main problem with the bankruptcy approach used for policy budget allocation is that project claims are not directly related to project importance. Highly significant programs with small claims are potentially penalized by the proportional solution or by the Constrained Equal Losses solution, while projects of low importance and small claims may be fully funded using the Constrained Equal Awards solution. The relevance approach, on the other hand, is highly dependent on the measure computed using expert opinions. This measure is not influenced by claims. Thus, given reliable expert assessments, the relevance factors method appears advantageous to the bankruptcy approach. This method is also far superior to the less formal methods currently used by decision-makers.

Suggested Citation

  • Vito Fragnelli & Ewa Kiryluk-Dryjska, 2019. "Rationing methods for allocating the European Union’s rural development funds in Poland," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 36(1), pages 295-322, April.
  • Handle: RePEc:spr:epolit:v:36:y:2019:i:1:d:10.1007_s40888-018-00140-6
    DOI: 10.1007/s40888-018-00140-6
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    Cited by:

    1. José-Manuel Giménez-Gómez & Foroogh Salekpay & Cori Vilella, 2023. "How to distribute the European regional development funds through a combination of egalitarian allocations: the constrained equal losses min," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-8, December.
    2. María-José Solís-Baltodano & José-Manuel Giménez-Gómez & Josep E. Peris, 2022. "Distributing the European structural and investment funds from a conflicting claims approach [Verteilung der europäischen Struktur- und Investitionsfonds aus einem kollidierenden Forderung Ansatz]," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 42(1), pages 23-47, April.
    3. Sebastian Cano-Berlanga & María-José Solís-Baltodano & Cori Vilella, 2023. "The Art of Sharing Resources: How to Distribute Water during a Drought Period," Games, MDPI, vol. 14(5), pages 1-16, August.
    4. Kiryluk-Dryjska, Ewa, 2023. "Coordination of collective action and methods of fair distribution in the public sector," Village and Agriculture (Wieś i Rolnictwo), Polish Academy of Sciences (IRWiR PAN), Institute of Rural and Agricultural Development, vol. 198(1), May.

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    More about this item

    Keywords

    Budget allocation; Bankruptcy problem; Relevance factor measures; Common agricultural policy; Rural development;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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