Preparing for the next MFF: Where did the money go in the past?

Daniel Gros and Roberto Musmeci ()
Additional contact information
Roberto Musmeci: Centre for European Policy Studies

No 19147, Working Papers LuissLab from Dipartimento di Economia e Finanza, LUISS Guido Carli

Abstract: This paper presents the state of play of the preparations for the next Multiannual Financial Framework (MFF) of the EU for the period 2021-2027. It then turns to an analysis of the allocation of regional support funding over the last two MFFs, using a standard growth model to interpret the results. It finds that: First, the distribution of Cohesion spending across regions (as proportion of regional GDP) can be explained to a large extent by a few variables, namely income per capita, unemployment and the importance of agriculture. However, there are also important differences across different clusters of regions. Regions in Southern Europe received less funding than those in Central and Eastern Europe even accounting for differences in these determinants. Second, regions in Southern Europe have a relatively high capital/output ratio and thus a lower productivity of capital. Moreover, their investment rates do not seem to be affected by the Structural Funds they receive. These results suggest the need for a change in emphasis from infrastructure investment to measures that improve overall allocation of resources.

Keywords: Fiscal transfers; Structural Funds; Cohesion Policy (search for similar items in EconPapers)
JEL-codes: C53 H50 O11 R11 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-eur, nep-mac and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.luiss.it/RePEc/pdf/lleewp/19147.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:lui:lleewp:19147

Access Statistics for this paper

More papers in Working Papers LuissLab from Dipartimento di Economia e Finanza, LUISS Guido Carli Contact information at EDIRC.
Bibliographic data for series maintained by Giovanna Vallanti ( this e-mail address is bad, please contact ).