The political economy of EU-funds in Poland: evidence for the period 2007-2013

Monika Banaszewska and Ivo Bischoff ()

MAGKS Papers on Economics from Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung)

Abstract: We provide an empirical study analysing the distribution of EU funds among 2478 Polish municipalities in the period of the multiannual financial framework 2007–2013. We find EU funds to be concentrated in smaller municipalities and economically weak sub-regions. Expenditures of EU funds per capita do not decrease in the municipalities’ fiscal capacity. This indicates that co-funding restrictions imposed by the EU did not prevent fiscally weak municipalities from attracting EU funds. Our primary focus rests on the question whether regional governments use their prominent role in the allocation process for EU funds to support their own political self-interest. Difference-in-difference estimations show that the answer is affirmative: Municipalities aligned with the regional government spend more EU funds per capita than nonaligned 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)
Pages: 43 pages
Date: 2016
New Economics Papers: this item is included in nep-cdm, nep-pol and nep-tra
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Persistent link: https://EconPapers.repec.org/RePEc:mar:magkse:201618

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