| The papers presented here analyze the effectiveness of EU directed funding administered through the European Regional Development Fund (ERDF) on 44 regions over the period of 1978-1988. The questions addressed concern both the program's theoretical economic foundations, that infrastructure accumulation significantly spurs economic growth, as well as issues concerning the practical administration of the program. In addressing in the latter question, I focus on two particular issues. Firstly, I ask whether regional political leverage affects the allocation of funding and secondly, I examine whether ERDF funding is fungible.;In addition, the analysis takes up the question of regional placement; that is, does the placement of a region within the larger EU system affect its economic prospects? Motivating this question is the observance of a center-periphery pattern of regions within the Union such that more central regions tend to be areas of high economic activity while more peripheral regions tend to be characterized by relatively lower per capita incomes. If regional placement matters, then the importance of infrastructure is clear: infrastructure can improve the functional distance of a region to areas of high economic activity. This in turn should prove important in helping to facilitate the relocation of existing firms away from central regions towards peripheral regions and in stimulating the growth of existing firms within a region by expanding market access.;The results of the analysis indicate that the placement is important in determining a region's economic prospects and that, not surprisingly, infrastructure accumulation contributes to economic growth. However, the analysis also indicates that regional political leverage does influence funding allocation and that, in addition, ERDF funding is fungible. Hence, while infrastructure accumulation does offer positive prospects for growth, the EU has not administered the program in such a way as to ensure its effectiveness. |
