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How does EU cohesion policy work? Evaluating its effects on fiscal outcome variables

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  • Hagen, Tobias
  • Mohl, Philipp

Abstract

The impact of EU Cohesion Policy has mainly been evaluated with regard to its growth effects. We extend the perspective by investigating the impact of EU Cohesion Policy on public investments and budget deficits in order to learn more about the channels through which this policy field works. Using a dataset of 27 EU countries for the time period 1982-2006, we find that EU Cohesion Policy payments do not cause public investments to increase significantly, which points to a crowding out of national investment. Moreover, the hypothesis that EU Cohesion Policy is used for the consolidation of public budgets cannot be completely rejected.

Suggested Citation

  • Hagen, Tobias & Mohl, Philipp, 2009. "How does EU cohesion policy work? Evaluating its effects on fiscal outcome variables," ZEW Discussion Papers 09-051, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:09051
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    Cited by:

    1. Tobias Hagen & Philipp Mohl, 2011. "Econometric Evaluation of EU Cohesion Policy: A Survey," Chapters, in: Miroslav N. Jovanović (ed.), International Handbook on the Economics of Integration, Volume III, chapter 16, Edward Elgar Publishing.
    2. Arbana Sahiti, 2017. "Creative Accounting- Nature, Usage, Labor and Relation with the Own Crisis Consequences in Practice in Kosovo," European Journal of Economics and Business Studies Articles, Revistia Research and Publishing, vol. 3, ejes_v3_i.
    3. Mohl, P. & Hagen, T., 2010. "Do EU structural funds promote regional growth? New evidence from various panel data approaches," Regional Science and Urban Economics, Elsevier, vol. 40(5), pages 353-365, September.
    4. Chiara Del Bo & Massimo Florio & Silvia Vignetti & Emanuela Sirtori, 2011. "Additionality and regional development: are EU Structural Funds complements or substitutes of national Public Finance?," Working Papers 201101, CSIL Centre for Industrial Studies.

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    More about this item

    Keywords

    EU Cohesion Policy; public investment; public deficits; panel data;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus

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