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How does Institutional Setting Affect the Impact of EU Structural Funds on Economic Cohesion? New Evidence from Central and Eastern Europe

Marina Gruševaja and Toralf Pusch ()

No 17/2011, IWH Discussion Papers from Halle Institute for Economic Research (IWH)

Abstract: Structural Funds are the main instrument of the EU cohesion policy. Their effective use is subject to an ongoing debate in political and scientific circles. European fiscal assistance under this heading should promote economic and social cohesion in the member states of the European Union. Recently, the domestic institutional capacity to absorb, to distribute and to invest Structural Funds effectively has become a crucial determinant of the cohesion process and has attracted attention of the scientific community. The aim of this study is to shed light on the effectiveness of Structural Funds in the countries of the first Central and Eastern European enlargement round in 2004. Using regional data for these countries, we have a look on the impact of several institutional governance variables on the effectiveness of Structural Funds. In the interpretation of results, reference is made to regional economics. Results of the empirical analysis indicate an influence of certain institutional variables on the effectiveness of Structural Funds in the new member states.

Keywords: EU cohesion policy; Structural Funds; institutional setting; EU new member states; EU-Kohäsionspolitik; Strukturfonds; Institutionen; Neue EU-Mitgliedsländer (search for similar items in EconPapers)
JEL-codes: R11 P2 O38 (search for similar items in EconPapers)
Date: 2011
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