Additionality and Regional Development: Are EU Structural Funds Complements or Substitutes of National Public Finance?

28 Pages Posted: 27 Jan 2016

See all articles by Chiara Del Bo

Chiara Del Bo

University of Milan - Department of Economics, Business and Statistics

Massimo Florio

University of Milan - Department of Economics, Management and Quantitative Methods (DEMM)

Emanuela Sirtori

CSIL Centre for Industrial Studies

Silvia Vignetti

CSIL - Centro Studi Industria Leggera

Date Written: January 27, 2016

Abstract

This paper deals with the effects of the transfer of additional funds on the real economy of recipient countries, in particular the European Member States. The intended and unintended effects of additional funds on national public finances and, ultimately, economic performance are discussed. Understanding the real effects of additional public funds and the possible complementarity or substitutability with national public finance is important for shaping the policies for the allocation of Structural Funds. Verification of additionality plays a role in ensuring that additional funds are used to effectively complement national expenditure programmes. In the case of the European Union, it is widely recognised that the current verification mechanism is affected by weaknesses, that prevent it from providing reliable and useful data to effectively assess additionality. For this reason, the paper suggests the European Commission to move away from the current verification approach and to adopt a new one that could more effectively assess to what extent the Structural Funds complement national investments.

Keywords: Public investment, substitution, displacement

JEL Classification: H5, H6, H7, O4

Suggested Citation

Del Bo, Chiara and Florio, Massimo and Sirtori, Emanuela and Vignetti, Silvia, Additionality and Regional Development: Are EU Structural Funds Complements or Substitutes of National Public Finance? (January 27, 2016). Available at SSRN: https://ssrn.com/abstract=2723402 or http://dx.doi.org/10.2139/ssrn.2723402

Chiara Del Bo

University of Milan - Department of Economics, Business and Statistics ( email )

Via Festa del Perdono, 7
Milan, 20122
Italy

Massimo Florio (Contact Author)

University of Milan - Department of Economics, Management and Quantitative Methods (DEMM) ( email )

Via Conservatorio 7
I-20122 Milano, 20122
Italy
+39 02 50321510 (Phone)
+39 02 50321505 (Fax)

HOME PAGE: http://www.demm.unimi.it/ecm/home

Emanuela Sirtori

CSIL Centre for Industrial Studies

Corso Monforte 15
Milano, 20122
Italy

Silvia Vignetti

CSIL - Centro Studi Industria Leggera ( email )

Via P. Amedeo 34
10123 Torino, 20122
Italy

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