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The Political Economy of EU-funds: Evidence from Poland

Monika Banaszewska () and Ivo Bischoff ()

Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), 2017, vol. 237, issue 3, 191-224

Abstract: We provide an empirical study analysing the distribution of EU funds among 2478 Polish municipalities in the period 2007–2011. EU funds are found to be concentrated in smaller municipalities and economically weak sub-regions, and do not increase in the municipalities’ fiscal capacity. Our primary focus rests on the question whether regional governments follow their own political self-interest when allocating EU funds even though national parties only play a minor role in Polish local politics and thus the conventional logic of supporting aligned governments does not apply. Difference-in-difference estimations show that the answer is affirmative: Municipalities whose voters are aligned with the regional government receive more EU funds per capita than non-aligned municipalities. Furthermore, we find support for the swing-district hypothesis: EU funds per capita decrease in the vote-share differential between the two leading parties.

Keywords: EU; cohesion funds; Poland; local government; party alignment; swing districts; vertical grants (search for similar items in EconPapers)
JEL-codes: D72 H77 (search for similar items in EconPapers)
Date: 2017
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