Multi-level governance, regional government, and the impact of structural funds: Evidence from European regions

This paper investigates the impact of Structural Funds expenditure on economic growth across European regions in the programming period 2000-2006 focusing on multi-level governance and differences in the degree of decentralization. The multi-level governance model has been endorsed as the best system of cohesion policy governance. This model emphasizes the role of sub-national governments in the policy-making process. We explore to what extent regional governments contribute in making cohesion policy more effective focusing on their degree of subnational authority, i.e. decentralization. We find that structural funds are more conducive to economic growth in regions with a higher degree of authority. This holds for both objective 1 and objective 2 types of regions.