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Regional inequality in the EU: how to finance greater cohesion

Dunford, Michael and Perrons, Diane (2012) Regional inequality in the EU: how to finance greater cohesion. European Planning Studies, 20 (6). pp. 895-922. ISSN 0965-4313

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Abstract

After outlining the overall scale and evolution of European Union (EU) public expenditure, this paper examines the mechanisms driving the allocation of Cohesion Policy resources. The analysis reveals the extent to which the outcome of the policy's principle- and formula-driven allocation mechanisms is modified by precedent and politico-economic considerations. In particular it shows that the consequent per capita final financial allocations (the intensity of aid) are greatest not for the poorest areas: up to 84% of EU GDP per head, aid increases as income increases. The analysis also emphasizes the on–off nature of the EU policy. In the light of these results a series of simulations are carried out. Attention is given first to a more economically sensitive treatment of transition regions, whose relative growth results in shifts from one category to another and to a mechanism capable of providing differentiated support to all disadvantaged regional economies. Attention is then given to ways of ensuring that final allocations are inversely proportional to income, and that most aid is concentrated on the most disadvantaged areas (Section 5). In the conclusions attention is paid to guidelines which might apply to the reform of the EU Cohesion Policy.

Item Type: Article
Official URL: http://www.tandfonline.com/loi/ceps20
Additional Information: © 2012 Taylor & Francis
Library of Congress subject classification: H Social Sciences > HJ Public Finance
J Political Science > JN Political institutions (Europe)
Sets: Departments > Gender Institute
Departments > Geography and Environment
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 30 Nov 2012 09:16
URL: http://eprints.lse.ac.uk/47561/

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