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Boulevard of broken dreams. The end of the EU funding (1997: Abruzzi, Italy)

Guglielmo Barone (), Francesco David () and Guido de Blasio
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Francesco David: Bank of Italy

No 1071, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: EU regional policies aim to push regions into self-sustaining growth. Successful interventions would imply a higher growth rate, not only during the treatment (when the region benefits from the transfers), but also after the expiry of the program (when the financing terminates). We investigate to what extent this happened in the case of Italy’s Abruzzi region, which entered into the Objective 1 (Convergence) program in 1989 and exited it in 1996 (without a transitional regime). More specifically we focus upon the post expiry period by implementing a synthetic control approach. Our results indicate that exiting the program had a negative effect on regional per-capita GDP growth. This result is a confirmation of the widespread evidence that during their implementation EU regional policies help boost the economic performance of the treated regions. However, additional evidence suggests that the permanent effect of the treatment is negligible: the policies fail to transfer the treated regions to a permanently higher GDP growth path.

Keywords: EU cohesion policy; Regional growth; Synthetic control method (search for similar items in EconPapers)
JEL-codes: O47 R11 (search for similar items in EconPapers)
Date: 2016-07
New Economics Papers: this item is included in nep-eec and nep-ure
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Citations: View citations in EconPapers (42)

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