IMAJINE researchers Julie Le Gallo and Lionel Védrine presented a paper at Regional Studies Association Winter Conference in London this November, and book chapter is in preparation.
The European Union is currently experiencing a delicate phase that questions its legitimacy. Citizens are increasingly defiant of public and political action, targeting the European Union. This is reflected in the latest national elections: Brexit, the polarization of voting in Italy and Austria, the rise of populism in France and Germany to name just a few examples.
This presentation study the impact of European cohesion Policy on regional growth and territorial inequalities linked to the Williamson Hypothesis. The question about the impact of this policy has generated a lot of papers with a lot of evaluation methods. Yet, no consensus could be reached on the effectiveness of this policy, and the research mainly focused on the effect on economic growth, with a lot of paper which use economic convergence model as benchmark.
A large part of the research focus on analysis at NUTS2 level, without take into consideration the dynamic of intra-regional disparities. In another part, previous papers mainly focus on average effects of the cohesion policy, while this policy are implemented differently across European regions and under very different economic conditions.
To fill this gap in the literature, we propose to work on two questions: First, how the cohesion policy affect both intra-regional disparities and regional development? Second, does the cohesion policy generate heterogeneous effects on regional development (and disparities)? A panel-data database of 266 NUTS2 regions of the UE-28 from 1995 to 2015 is used. The panel-data regression is employed with fixed effects and with simultaneous equations in order to control unobservable characteristics, spatial dependence and simultaneity between regional development and disparities. Cohesion funds have a positive effect on both growth and reducing regional disparities, but this effect is diverse, dependent of regional endowments: population density, investment, trade openness and quality of government.