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Allocation of European structural funds and strategic interactions: is there a yardstick competition between regions in the public aid for development?

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  • Lionel Vedrine

    (CESAER - Centre d'Economie et de Sociologie Rurales Appliquées à l'Agriculture et aux Espaces Ruraux - INRA - Institut National de la Recherche Agronomique - AgroSup Dijon - Institut National Supérieur des Sciences Agronomiques, de l'Alimentation et de l'Environnement)

Abstract

This paper analyzes the relationships between the degree of decentralization of public policy and the emergence of horizontal strategic interactions. We analyze the structural funds allocation process in determining how the structure of governance of cohesion policy a ects the development of strategic interactions between regional governments. We develop a political agency model in which we capture the e ect of the governance structure of public policy on the decision of voters to acquire information on the activities of local governments. We show that the appearance of spatial interactions resulting from a mechanism of "yardstick competition" is increasing with the degree of policy decentralization. From an empirical analysis of the 2000-06 period, we con rm the proposed model by showing that spatial interactions are more intense when the policy governance is decentralized.This work highlights a new source of spatial interaction in the allocation of grants from institutional determinants in addition to socioeconomic factors studied so far.

Suggested Citation

  • Lionel Vedrine, 2012. "Allocation of European structural funds and strategic interactions: is there a yardstick competition between regions in the public aid for development?," Post-Print hal-02803676, HAL.
    • Handle: RePEc:hal:journl:hal-02803676
    Note: View the original document on HAL open archive server: https://hal.inrae.fr/hal-02803676
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    File URL: https://hal.inrae.fr/hal-02803676/document
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    Cited by:

    1. Andre Torre & Vu Hai Pham & Arnaud Simon, 2015. "The ex-ante impact of conflict over infrastructure settings on residential property values: The case of Paris’s suburban zones," Urban Studies, Urban Studies Journal Limited, vol. 52(13), pages 2404-2424, October.
    2. Peter Schmidt, 2016. "Internal migration and EU regional policy transfer payments: A panel data analysis for the EU-28 member countries," ERSA conference papers ersa16p172, European Regional Science Association.

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