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Conditionalities and the Performance of European Structural Funds: A Principal-Agent Analysis of Control Mechanisms in European Union Cohesion Policy

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  • John Bachtler
  • Martin Ferry

Abstract

B achtler J. and F erry M. Conditionalities and the performance of European Structural Funds: a principal-agent analysis of control mechanisms in European Union cohesion policy, Regional Studies . In the context of debates on the performance of European Union cohesion policy, this paper considers how the European Union has used control mechanisms to influence the use of Structural Funds by member states. Using the principal-agent model, this paper examines empirically three case studies of conditionalities applied to the absorption of funding (decommitment rule), outcomes of interventions (performance reserve) and targeting of expenditure (earmarking) in European Union programmes over the 2000-2013 period. The findings reveal different levels of effectiveness of the three conditionalities, attributable to the differential scope for trade-offs during the regulatory negotiations, external pressure and principal self-interest. The paper discusses an effectiveness threshold for introducing controls, the tensions between multiple conditionalities and the limitations of top-down control mechanisms in influencing agent behaviour.

Suggested Citation

  • John Bachtler & Martin Ferry, 2015. "Conditionalities and the Performance of European Structural Funds: A Principal-Agent Analysis of Control Mechanisms in European Union Cohesion Policy," Regional Studies, Taylor & Francis Journals, vol. 49(8), pages 1258-1273, August.
    • Handle: RePEc:taf:regstd:v:49:y:2015:i:8:p:1258-1273
    DOI: 10.1080/00343404.2013.821572
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    References listed on IDEAS

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    1. Stefan G. Koeberle, 2003. "Should Policy-Based Lending Still Involve Conditionality?," The World Bank Research Observer, World Bank, vol. 18(2), pages 249-273.
    2. Stefan Koeberle & Harold Bedoya & Peter Silarszky & Gero Verheyen, 2005. "Conditionality Revisited : Concepts, Experiences, and Lessons," World Bank Publications - Books, The World Bank Group, number 7346.
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    Cited by:

    1. Carlos Mendez & John Bachtler, 2017. "Financial Compliance in the European Union: A Cross-National Assessment of Financial Correction Patterns and Causes in Cohesion Policy," Journal of Common Market Studies, Wiley Blackwell, vol. 55(3), pages 569-592, May.
    2. Beata Skubiak, 2021. "Revitalization Education in Problem Areas as a Tool for the Implementation of Social Welfare," Sustainability, MDPI, vol. 13(20), pages 1-19, October.
    3. repec:ces:ifofor:v:19:y:2018:i:1:p:10-15 is not listed on IDEAS
    4. Larisa-Diana POP & Anca BORZA, 2017. "The Europe 2020 Strategy And Beneficiaries Of Structural Funds," Proceedings of the INTERNATIONAL MANAGEMENT CONFERENCE, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 11(1), pages 120-128, November.
    5. Cunico, Giovanni & Aivazidou, Eirini & Mollona, Edoardo, 2021. "Beyond financial proxies in Cohesion Policy inputs’ monitoring: A system dynamics approach," Evaluation and Program Planning, Elsevier, vol. 89(C).
    6. Sébastien Bourdin, 2022. "The Challenges of Cohesion Policy in a postpandemic Europe: Towards greater territorial cohesion? [Les défis de la Politique de Cohésion dans une Europe post-pandémique : vers une plus grande cohés," Post-Print hal-04190368, HAL.
    7. Ramona Pîrvu & Roxana Bădîrcea & Alina Manta & Mihaela Lupăncescu, 2018. "The Effects of the Cohesion Policy on the Sustainable Development of the Development Regions in Romania," Sustainability, MDPI, vol. 10(7), pages 1-21, July.

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