Explaining differences in regional performance: administrative capacity and political factors. The case of Structural Funds implementation in Italian Objective 1 regions

Abstract

This thesis starts from the following question: Why, after 16 years of receiving Structural Funds, do some regions still have difficulties in spending their allocated resources? Empirical evidence shows that Funds implementation rates have varied widely among European Union Objective 1 regions. The overall performance of Italian regions, in particular, has consistently lagged behind other countries. However, an investigation into individual Italian Objective 1 regions reveals that not all follow this general trend. Indeed, some regions have outperformed others remarkably. Why is this the case? I explore these differences and identify potential variables that may account for such regional variation. My central hypothesis is that differences in implementation are strongly dependent on the degree of administrative capacity that exists in the recipient regional government. Due to the deficiency in the existing literature of a clear definition of administrative capacity, I attempt to fill this gap by introducing a novel characterization that allows me to operationalize and measure the concept. The core of the methodology is an in-depth case study supported by field research based on personal interviews and documented questionnaires. I investigate two contrasting southern Italian regions, Sicily and Basilicata, measure their respective degrees of administrative capacity and provide evidence to suggest that this latter variable is positively correlated to Structural Funds implementation. Answering my first query has prompted a further question: if it is trite that the variation in implementation of resources between regions can be explained by different degrees of regional administrative capacity, then what is it that determines the degree of administrative capacity at the regional level? In studying this second question I further test the hypothesis that the level of administrative capacity is influenced by three key political factors: namely, political interference, government stability and political accountability