Evaluation of Eu Cohesion Policy Impact on Regional Convergence: Do Culture Differences Matter?


Attention to the harmonised economic growth by promoting regional economic convergence was paid in the 1960s, at the commencement of European economic integration. It served as a basis for initiation of programs intended to reduce disparities among regions. For the current programming period (2014-2020) over 350 billion euro was allocated to promote cohesion (more than 340 billion for 2007-2013 and about 213 billion for 2000-2006) and a considerable part of that funding went specially to promote regional convergence; therefore, the analysis of regional convergence in the EU countries is essential due to both economic and financial reasons. Regional policy can be considered successful if regional disparities are found to be decreasing; however, research on convergence/divergence issue has not provided any unambiguous conclusions. We aim to enrich this field of analysis by incorporating cultural dimension while analysing the factors influencing regional convergence. In order to identify a causal link between culture and economic outcomes, we define culture as the customary beliefs and values that ethnic, religious and social groups transmit almost unchanged from generation to generation. Our research hypothesis is that regional policy impact on regional convergence differs between groups of countries characterised by historically diverse cultural experience. Using panel data approach like FD and covering the two last programming periods along with a set of variables to control country-specific economic environment, we investigate whether the success of Cohesion policy has depended on cultural differences in the north, south, west and central-east groups of European countries.

If the inline PDF is not rendering correctly, you can download the PDF file here.

  • Andersson, F.N.G., Edgerton, D. L. & Opper, S. (2013). A Matter of Time: Revisiting Growth Convergence in China. World Development, (45), 239-251.

  • Bähr, C. (2008). How does sub-national autonomy affect the effectiveness of structural funds? Kyklos, (61), 3-18.

  • Barry, F. (2003). Economic Integration and Convergence Processes in the EU Cohesion Countries. Journal of Common Market Studies, (41(5)), 897-921.

  • Baumol, W. J. (1986). Productivity Growth, Convergence, and Welfare: What the Long-run Data Show. American Economic Review, (76 (5)), 1072-1085.

  • Becker E., von Ehrlich M. & Fenge R. (2009). Going NUTS: the effect of EU structural funds on regional performance. CESifo Working Paper, (2495). Available from Internet: https://www.nottingham.ac.uk/gep/documents/seminars/2010/sasch-becker.pdf.

  • Benabou, R. & J. Tirole (2006), Beliefs in a Just World and Redistributive Politics, Quarterly Journal of Economics, (121 (2)), 699-746.

  • Beugelsdijk, M. & Eijffinger, S. (2005) The Effectiveness of Structural Policy in the European Union: an empirical analysis for the EU-15 in 1995-2001. Journal of Common Market Studies, (40), 37-51.

  • Bisin, A & T. Verdier (2001), The Economics of Cultural Transmission and the Evolution of Preferences, Journal of Economic Theory, (97(2)), 298-319.

  • Boldrin, M. & Canova F. (2001). Inequality and convergence in Europe’s regions: Reconsidering European regional policies, Economic Policy, (32), 205-45.

  • Brown, N. (2001). Friedrich Ratzel, Clark Wissler, and Carl Sauer Culture Area Research and Mapping. CSISS Classics. UC Santa Barbara: Center for Spatially Integrated Social Science.

  • Bussoletti, S. & Esposti, R. (2004). Regional convergence, structural funds and the role of agriculture in the EU. A panel-data approach. Università Politecnica delle Marche, Dipatimento di Economia, Working Paper 220. Available from Internet: http://docs.dises.univpm.it/web/quaderni/pdf/220.pdf

  • Cappelen, A., Castellacci, F., Fagerberg, J. & Vespagen, B. (2003). The Impact of EU Regional Support on Growth and Convergence in the European Union. Journal of Common Market Studies, (41(4)), 621-44.

  • Castells, M. (1972). The Urban Question. London: Edward Arnold.

  • Cherodian, R. & Thirlwall, A.P. (2015). Regional disparities in per capita income in India: convergence or divergence? Journal of Post Keynesian Economics, (37 (3)), 384-407.

  • Dall’erba, S. & Le Gallo, J. (2008). Regional convergence and the impact of European structural funds 1989-1999: A spatial econometric analysis. Papers in Regional Science, (87(2)), 219-44.

  • De Freitag M., Pereira F., & Torres F. (2003). Quality of national institutions and Objective 1 status. Intereconomics, September/October, 270-275.

  • De la Fuente, A. (2003). Does Cohesion Policy Work? Some General Considerations and Evidence from Spain. In: B. Funck & L. Pizzati, eds, European integration, regional policy, and growth. Washington, D.C.: World Bank, 153-165.

  • De Long, B. & Summers, L. (1991). Equipment Investment and Economic Growth. Quarterly Journal of Economics, (106), 445 - 502.

  • Dey, S. P. & Debasis, N. (2015). Testing sigma and unconditional beta convergence of GDP sor SAARC countries: Can inclusion of China further consolidate the convergence? Global business review, (16 (5)), 845-855 .

  • EC (European Commission). (2004). Third progress report on economic and social cohesion, COM 107 final, Brussels.

  • EC (European Commission). (2007). Cohesion Policy 2007-13. National Strategic Reference Frameworks, Luxembourg.

  • EC (European Commission). (2010a). Conclusions of the fifth report on economic, social and territorial cohesion. The future of cohesion policy, COM (2010) 642 final, Brussels.

  • EC (European Commission). (2010b). Cohesion policy: Strategic report 2010 on the implementation of the programmes 2007- 2013, SEC (2010) 360 final, Brussels.

  • Ederveen S., de Groot H. & Nahuis R. (2006). Fertile Soil for Structural Funds? A panel data analysis of the conditional effectiveness of European Cohesion Policy. Kyklos, (59), 17-42

  • Ederveen, S., Gorter, J., Mooij, R.D. & Nahuis, R. (2003). Funds and Games: The Economics of European Cohesion Policy. European Network of Economic Policy Research Institutes. Available from Internet: http://people.ds.cam.ac.uk/mb65/library/ederveen.a.o.2003.pdf.

  • Eggert, W., von Ehrlich, M., Fenge, R., & Koenig, G. (2007). Konvergenz- und Wachstumseffekte der europaeischen Regionalpolitik in Deutschland. Perspektiven der Wirtschaftspolitik, (8 (2)), 130-46

  • Ezcurra, R. & Pascual, P. (2008). Fiscal Decentralization and Regional Disparities: Evidence from Several European Union Countries. Environment and Planning A May, (40), 1185-1201.

  • Fagerberg, J. & Verspagen, B. (1996). Heading for divergence? Regional growth in Europe reconsidered. Journal of Common Market Studies, (34(3)),431-48.

  • Farrell, M. (2004). Regional Integration and Cohesion--Lessons from Spain and Ireland in the EU. Journal of Asian Economics, (14 (6)), 927-946.

  • Garcıa-Mila, T. & McGuire, T. (2001). Do interregional transfers improve the economic performance of poor regions? The case of Spain. International Tax and Public Finance, (8), 281-295.

  • García-Solanes J. & María-Dolores R. (2002). The Impact of European Structural Funds on Economic Convergence in European Countries and Regions. in: W. Meeusen and Villaverde J. (eds), Convergence Issues in the European Union, Edward Elgar.

  • Gaspar V. & Leite A.N. (1994). Cohesion and convergence: The economic effects of EC structural transfers. Economia, (18), 87-108.

  • Grossman, G. & Helpman, E. (1991). Innovation and Growth in the Global Economy. London: MIT Press.

  • Guiso, L., Sapienza, P. & Zingales, L. (2006). Does Culture Affect Economic Outcomes? Journal of Economic Perspectives, (20 (2)), 23-48.

  • Hagen, T. & Mohl, P. (2008). Does EU Cohesion Policy Promote Growth? Evidence from regional data and alternative econometric approaches. ZEW Discussion Papers 08-086. Available from Internet: http://econstor.eu/bitstream/10419/27563/1/dp08086.pdf.

  • Huang, Q. & Chand, S. (2015). Spatial spillovers of regional wages: Evidence from Chinese provinces China Economic Review, (32), 97-109.

  • Jones, E.L. (2006). Cultures Merging: a Historical and Economic Critique of Culture. Princeton University Press, Princeton

  • Kaldor, N. (1981). The Role of Increasing Returns, Technical Progress and Cumulative Causation in the Theory of International Trade and Economic Growth. Economie Appliquee, (34 (4)), 593-617.

  • Ke, S. & Bergman, E. (1995). Regional and Technological Determinants of Company Productivity Growth in the Late 1980s. Regional Studies, (29 (1)), 59-71.

  • Krugman, P. & Venables, A. (1995). Globalization and Inequality of Nations. Quarterly Journal of Economics, (110), 857 - 880.

  • Krugman, P. (1991). Increasing Returns and Economic Geography. Journal of Political Economy, (99), 183-199.

  • Krugman, P. (1993a). Towards a Counter-Countrerrevolution in Development Theory. World Bank Economic Review, (6 (1)), 15-38.

  • Krugman, P. (1993b). On the Number and Location of Rities. European Economic Review, (37), 293-298.

  • Krugman, P. (1995a). Technological Change in International Trade, 342 - 365. In Stoneman, P. ed. Handbook of the Economic of Innovation and Technolgical Change. Oxford: Blackwell.

  • Krugman, P. (1995b). Development, Geography and Economic Theory. London: MIT Press.

  • Landes, D. (1998). The Wealth and Poverty of Nations. Abacus, London

  • Martin, R. and Sunley, P. (1998), Slow Convergence? The New Endogenous Growth Theory and Regional Development. Economic Geography, (74), 201-227.

  • Massey, D. & Meegan, R. (1982). The Anatomy of Job Loss: The How, Why and Where of Employment Decline. London: Methuen.

  • Mullen, J. & Williams, M. (1990). Explaining TFP Differentials in Urban Manufacturing. Journal of Urban Economics, (28), 103-123.

  • Nordregio (Nordic Centre for Spatial Development). (2009). The potential for regional Policy Instruments, 2007-2013, to contribute to the Lisbon and Gothenburg objectives for growth, jobs and sustainable development. Final Report to the European Commission, Directorate-General for Regional Policy, Evaluation Unit, Contract No 2007.CE.16.0.AT.041, Stockholm.

  • North, D. (1981). Structure and Change in Economic History. Norton, New York

  • Noyelle, T.J. & Stanback Jr., T.M. (1983). The Economic Transformation of American Cities. Totowa, NJ: Rowman and Allanheld.

  • Piore, M.J. & Sabel, Ch.F. (1984). The Second Industrial Divide. New York: Basic Books.

  • Prochniak, M. & Witkowski, B. (2015). Does beta convergence imply stochastic convergence of GDP per capita levels between countries? Empirical evidence. 20th International Academic Conference Proceedings, 382.

  • Ramajo J., Marquez M., Hewings G. & Salinas M. (2008). Spatial heterogeneity and interregional spillovers in the European Union: do cohesion policies encourage convergence across regions? European Economic Review, (52(3)), 551-67.

  • Romer, P. (1990). Endogenous Technological Change. Journal of Political Economy, (98 (5)), 71-102.

  • Saxenian, A.L. (1994). Regional Advantage: Culture and Competition in Silicon Valley and Route 128. Cambridge, MA: Harvard University Press.

  • Schwartz, S.H. (2014). National Culture as Value Orientations: Consequences of Value Differences and Cultural Distance. Handbook of the economic arts and culture, 2. Edited by Victor A. Ginsburgh - Brussels, Belgium; David Throsby Sydney, Australia.

  • Shixue, J. (2003). Cultural Factors and Economic Performance in East Asia and Latin America.

  • Smetkowski, M. & Wójcik, P. (2012). Regional Convergence in Central and Eastern European Countries: A Multidimensional Approach. European Planning Studies, (20 (6)), 1-17.

  • Smith, N. (1984). Uneven Development. Oxford: Basil Blackwell.

  • Thirlwall, A.P. (2013). Regional Disparities in Per Capita Income in India: Convergence or Divergence? Studies in Economics (1313), School of Economics, University of Kent.

  • Watkins, A.J. & Perry, D.C. (1977). Regional Change and the Impact of Uneven Urban Development. In The Rise of the Sunbelt Cities, Perry, D.S. and Watkins, A.J., eds. Beverly Hills, CA: Sage.


Journal + Issues