EUROPEAN TRANSFERS: EVALUATION AND CONSEQUENCES

Abstract

The paper is an evaluation of EU regional policy. It asks whether cohesion programmes contribute to the reduction of differences. In the first part of the study the results of three different methodological approaches are briefly examined to analyse effects. The answer to the question is not at all unambiguous, which is why the second half of the paper attempts to find those factors which may cause the regional policy of the EU to fail to achieve its desired objectives. According to the literature review these factors are (1) the crowding out effect, (2) the existence of rent-seeking and moral hazard, (3) the counterbalancing effect of national policies, (4) a concentration of economic activities (mainly industries representing high added value), and (5) the short time frame. Finally the study establishes those preconditions which, when present, can be considered necessary and sufficient for the redistributed funds to initiate growth